{"id":157913,"date":"2022-01-03T20:41:32","date_gmt":"2022-01-03T15:11:32","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=157913"},"modified":"2022-01-03T20:41:32","modified_gmt":"2022-01-03T15:11:32","slug":"the-crypto-assets-conundrum","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/the-crypto-assets-conundrum\/","title":{"rendered":"The crypto assets conundrum"},"content":{"rendered":"\n

News<\/strong>: Arguments for legalising crypto assets in India are weak, and in fact dangerous.<\/p>\n

What is the case for Crypto regulation?<\/h5>\n

–<\/strong> Cryptocurrency enables relatively invisible transactions, with serious implications for crime, terrorism, money laundering, tax evasion, etc.<\/p>\n

–<\/strong> Another worry is that the crypto mania is getting built of purely speculative investments. The eventual bursting of such bubbles<\/strong> will badly hurt people.<\/p>\n

–<\/strong> Further, crypto threatens the state\u2019s macro-economic role.<\/p>\n

– Also, Govt wants to avoid any tech-unfriendly image.<\/p>\n\n\n\n
Read more<\/strong> – The monetary, fiscal challenges of Cyptocurrency<\/span><\/a><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
Why legalising Crypto assets is dangerous?<\/strong><\/h5>\n

Firstly,<\/strong><\/em> Crypto is more divisible and portable<\/strong> than land, gold, stocks and even physical currency. Hence, once legalised, crypto asset\u2019s advance towards becoming a medium of exchange would be unstoppable.<\/p>\n

Secondly, Crypto is mostly<\/strong><\/em>\u00a0a s<\/strong>peculative asset<\/strong><\/em>: The 2008 financial crash happened largely because some \u2018assets\u2019 lost all connection to any kind of underlying value. When this happens to Crypto, the bubble will burst, gravely hurting people. If the Govt legalises a purely speculative asset, it provides a green signal to investors to invest in it and blow into the bubble. When the bubble bursts, there may be a heavy political price to pay for the ruling dispensation.<\/p>\n

Thirdly,<\/strong><\/em> any underlying value<\/strong> of Crypto is only in terms of an expectation of it’s widespread acceptance<\/strong> as a medium of exchange in the future. By legalising Crypto assets, Govt will inadvertently be promoting this expectation.<\/p>\n

Fourthly,<\/strong><\/em> legalising cryto assets primarily to support blockchain technology<\/a><\/strong><\/span> is also not tangible. It’s like signing on to the use of space as a new frontier of war just because it would promote India\u2019s space industry. Blockchain has thousands of applications other than crypto. Various innovations and services, including using blockchains are indeed possible over the top of a Central Bank Digital Currency (CBDC)<\/strong><\/a><\/span>, as an alternative to private cryptocurrencies.<\/p>\n

Fifthly, <\/strong><\/em>the argument to let both public and private currencies co-exist, leaving it to \u2018people\u2019s choice\u2019, is also deceptive<\/strong>. The powerful feel the distributive potential contained in public currency systems is unfair. Hence, they will all push private currencies. Their combined economic power itself would ensure an overwhelming dominance of private currencies over the public currency.<\/p>\n

More articles on Crypto<\/strong>:<\/p>\n

–<\/strong> The Crypto conundrum<\/a><\/strong><\/span><\/p>\n

–<\/strong> Cryptocurrencies in India: Ban or regulation – Explained, pointwise<\/a><\/strong><\/span><\/p>\n

–<\/strong> Why arguments against Cryptocurrency regulation are very weak<\/a><\/strong><\/span><\/p>\n

Source<\/strong>: This post is based on the article \u201cThe crypto assets conundrum<\/strong>\u201d published in The Hindu<\/strong> on 3rd<\/sup> Jan 2022<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

News: Arguments for legalising crypto assets in India are weak, and in fact dangerous. What is the case for Crypto regulation? – Cryptocurrency enables relatively invisible transactions, with serious implications for crime, terrorism, money laundering, tax evasion, etc. – Another worry is that the crypto mania is getting built of purely speculative investments. The eventual… Continue reading The crypto assets conundrum<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10498],"class_list":["post-157913","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704757693},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/157913","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=157913"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/157913\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=157913"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=157913"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=157913"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}