Crypto is still not a legal tender but innovations under stringent overnight possible

November 23, 2021

Even though a new crypto bill is likely to be introduced in the winter session of Parliament starting November 29, it is said that the centre has intention of giving the legal tender status for cryptocurrencies, according to Financial Express. However, it will grant some space for innovation in the crypto ecosystem under strict supervision. Furthermore, the space that will be open for innovations will be regulated to avoid misuse.

The upcoming crypto bill will help create an architecture to enable regulation of the crypto eco-system. According to a source, this development can leave adequate leeway for the government to intervene fast, responding to the evolving situation. This will help in eliminating a vague status of crypto being in asset class and ease the launch of digital currency.

As crypto doesn’t derive its value from any underlying assets or earnings, the authorities find it unsettling.

As crypto doesn’t derive its value from any underlying assets or earnings, the authorities find it unsettling.
Furthermore crypto’s value totally being dependent on what the investor will pay for it makes it easier to fluctuate the price by speculative bids and with the anonymity tag, there’s always a fear of it leading to finance terrorism or be used to funnel black money.

The Parliamentary Standing Committee on Finance, after a meeting on November 15, is learnt to have pitched for allowing crypto exchanges to function, albeit under strict regulations.

Source: Financial Express

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