ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Cryptocurrency

Ambiguities and the Impending Crisis

Cryptocurrency

Consequent to the lifting of the “ban” imposed on the trade of crypto-assets by the Supreme Court of India, there has been a surge of interest in investing in crypto-assets from the general public, spurred by aggressive marketing campaigns by well-funded start-ups. In the absence of proper regulation, there is a very real danger that the public may be mis-sold this product with harm to the wider economy.

 

As a cricket lover who tuned into the  recent ICC World T20 broadcast from the United Arab Emirates, as absorbing as the on-field action was, I noticed something disconcerting in the breaks between the covers. A large number of advertisements had been placed by start-ups working in the “cryptocurrency” space. Some promise ease of investment (for as little as `100), some promise returns of four-times regular fixed deposits, while the default appeal seems to be of the opportunity to make life-changing amounts of money at the click of a mouse.

To anyone who has followed the world of finance, all of this sounds scarily fami­liar. More so in the Indian context where the lack of financial education and the absence of access to regulated financial products have resulted in a series of Ponzi schemes, and speculative bubbles have resulted in the destruction of household wealth. When the cryptocurrency industry bodies claim that Indian citizens have put in more than `6 lakh crore into cryptocurrencies (Economic Times 2021), it is a source of worry when one realises that the entire sector is effectively unregulated at the present time with little or no oversight on what happens to investors’ wealth.

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Updated On : 20th Nov, 2021

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