Cryptocurrency is now a part of pop culture, thanks to celebrities like Elon Musk and Snoop Dogg endorsing it. Boomers, millennials, or Gen Z – everybody knows some aspect of it. However, the cryptocurrency industry is not a complacent one. It is brimming with controversies. While for some, it is the utmost innovation in the financial space, others are still skeptical about it. Whatever may be the truth, the only thing we are sure of is that the size of crypto assets in India is around INR 45,000 crores with approximately 15 million investors[1]. And, this is proof enough to indicate that the cryptocurrency market in India is large enough and likely to sustain in the long run, irrespective of the ambiguity and market instabilities. Honestly, India needs these regulations now more than ever. For the industry to grow unabated and people to feel secure in their investments, it is high time that cryptocurrency regulations come to play.
Cryptocurrency is a very unregulated market. However, the utter size of investors and investment has forced the government to think about framing a law. Many investors have tasted success overnight, and there is no stopping them now. A majority, especially Gen Z, look at crypto as easy money. They believe that Bitcoin, Ethereum, and other cryptos can make them rich instantaneously. So much so that youths who never thought of investing in any other financial instrument are propelling the crypto market.
It seems like crypto has hatched a new set of investors. These young investors need to be protected. They are ambitious, impulsive, and gullible enough to be scammed. Hence, cryptocurrency regulations in India are a must.
While cryptocurrency exchanges and experts try to guard their investors against mishaps and help them make sound decisions, people keep getting scammed. The urge to become a millionaire overnight makes people easy prey to scammers. Take the example of the latest Squid game crypto scam. Inspired by the Korean series, the Squid Game ‘play and earn’ token saw a massive spike with its launch. People could buy tokens and use them in online games to earn more tokens. These tokens could be exchanged for other cryptocurrencies or fiat currencies. However, the sudden market slump saw investors lose millions, and the tokens are now obsolete.
This is just one example. These kinds of scams will only grow with the popularity of cryptocurrencies. And, we need strict cryptocurrency regulations that safeguard us from such scams.
With the proposed Cryptocurrency and Regulation of Official Digital Currency Bill, India is on its way towards a crypto regulation, but anything tangible is yet to come. The bill intends to permit cryptocurrency as an asset but forbids its use as payment or currency. It states that the Reserve Bank will regulate all cryptos and suggests banning all private cryptocurrencies in the country. Besides, it also proposes punishing offenses with imprisonment for a year and a half, and a fine of up to ₹ 50 crores.
However, there is still time for the bill to come into force as Indian cryptocurrency regulations must be in sync with the global framework that is still evolving. The ideal way would be to wait and watch and then craft the regulations to ensure consumer protection in the long run. We admire the positive strides made by the government in bringing apt policy changes to the crypto ecosystem. Till then, it is advisable to use your sound judgment to make better investment choices. And, for a safe and reliable crypto journey, start trading with ZebPay.
