Since its inception in 2009, Bitcoin in particular and the general idea of a global digital currency like crypto saw incredible changes. It went from an academic concept of the distant future to an immediate virtual reality of Global investments. The tumultuous journey of this digital currency has garnered a considerable amount of debate. As we speculate its legitimacy in this blog, another youth has hopped on the bandwagon and invested.
Moving From Fad to Future
While different theories justify the skyrocketing growth of Bitcoin and Ethereum the most promising one has to be the social media buzz. Particularly in the Indian context, the only explanation of the whopping numbers on investment charts in the last few years has to be the generation’s fear of missing out on a hot investment opportunity. An investment not backed by due research is a ticking time bomb. Thus, the exponential growth in crypto-investment does not necessarily translate to its bright future.
The Cryptics Involved in Cryptocurrency
Adding to the uncertainty of the future of cryptocurrency is its highly volatile nature. The decentralized currency is a breeding ground for scammers and illegitimate activities. The US saw a 1000 percent fraud rate until October 2020, and with no regulatory bodies in place, the numbers are bound to multiply. Due to this Cryptocurrency has been incriminated by several nations and come under the scanner of India’s SC committee which recommended a ban on private cryptocurrency.
The Government’s Interventions
Steering clear of The Steering Committee’s sweeping statements, the Indian government has taken a speculatory turn in the cryptocurrency and fintech space. The Virtual Currency Laws and the Blockchain and Cryptocurrency regulations in the US paved the way for developing nations’ policymakers to legislate virtual currency laws and regulations. The Finance Minister’s ushering remarks on a specific crypto bill’s introduction seem to be a rather good sign for Indian Venture Capitalists and budding traders alike.
Redressal of the Reserve Bank of India
Marking India’s official entry amongst global digital currencies, the Central Bank Digital Currency is the hallmark of a truly digital India. The CBDC’s are a revolutionary move in terms of minimizing the printing cost of physical currency and regulating the supply chain. But in terms of private blockchain and cryptocurrency, the redressal provided by the RBI seems to be falling short. A centralized digital currency will scarcely appease the investors who invest in private cryptocurrency for its inherent design of a limited supply. Investors across the world turned to private digital currencies evading the currency debasements by respective nations. Thus both private digital currencies and CBDC have their limitations.
Like any new technological development, India’s financial tech space is seeing a lot of advancements. So, the debate around cryptocurrency being a fad or fortified future of global investments has metamorphosed itself. One now speculates how India and the world shall come to terms with this dynamic advancement. Considering cryptocurrency as a fad shall be an error comparable to calling the Internet a passing trend, but Cryptocurrency, as we know it today, is susceptible to change.