Can the rise of cryptocurrency impact currency market in India?
A cryptocurrency is a digital currency created and stored electronically. Unlike monetary currency, the supply of cryptocurrency is not determined by any central bank or authority and the network is completely decentralised.
Slowly, cryptocurrencies are coming under the regulatory net in order to check misuse. Japan recently became the first country to regulate cryptocurrencies; the US is quickly laying down regulatory guidelines, the UK and Australia continue to work on the formalities while China has recently banned Initial Coin Offerings (ICO) due to various reasons, including various ICO scams around the world.
Though India plays a relatively small role in the global cryptocurrency market, only about 2% of the global cryptocurrency market cap, the RBI has warned about the potential financial, legal, customer protection and security-related risks in cryptocurrency, amidst prevalent media rumours of RBI launching its own form of cryptocurrencynamed Lakshmi. The recent action of conducting survey by the IT department over all the major exchanges has also triggered issuance of income tax demand notice by the department to the users of these exchanges.
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