The El Salvador government announced that it will begin acceptance of Bitcoin as a legal currency. This is the most recent major change in the current debate about cryptocurrency. A technological advancement that opens up the possibilities for the future of cryptocurrency to have equal risk and opportunity.
The discussion in India is growing larger. Even though it was the Government of India and the Reserve Bank of India (RBI) that evaluated the advantages and disadvantages of allowing the legal usage of cryptocurrencies. The growing popularity of apps that trade in cryptocurrency proves how the marketplace is leading in regulation.
Many Factors Affect Cryptocurrency
In discussing the potential and value of cryptocurrencies, the following is an explanation of these factors:
Blockchain, the technology on which cryptocurrency is built on is based on the strength of anonymous users. In the event that an asset is going to integrate with the financial system in its formal form. The owners and holders can’t remain completely anonymous. The goal is to increase the trust of the new users and to keep the mind from entangling in evil.
Financial systems are built on the principle of authenticity and seek to trace all participants according to the concept of KYC (Know Your Customer). Thus, all holders of cryptocurrency have to disclose their identity. As well as the origin of the money they invest in it. As the ultimate use of the cryptocurrency must tracking.
KYC confirmed that cryptocurrency can also use in accordance with existing rules against money laundering. There are some who question which cryptocurrency comes from. It includes in the Foreign Exchange Control Act. The government must look into the inclusion of the rise of cryptocurrency investment in the financial realm. They could be a worldwide asset to investors in clubs and take advantage of the tax system that currently is applicable to all assets.
The ability of issuance is among the most fundamental elements that make up the nation-state of today. Anything that challenges those forces will oppose. It is the Government of India and the Reserve Bank of India that must beware of the temptation to use cryptocurrency as an alternative to legal tender.
In keeping with the regulatory sandbox, it is necessary to allow private parties to utilize cryptocurrency to sign joint contracts. As the scope of its application grows, we will examine using private capital. That’s one of the method use to introduce cryptocurrency to the general population.
Notification and Education About Cryptocurrency
In the case of financial products like mutual funds and insurance. The regulators and governments should be focusing on educating customers about with cryptocurrency have equal risk and opportunity.
Blockchain has widely used the basis of cryptocurrency is blockchain technology which is a publically record accessible, verified, and an unchangeable pile of data. In a country, the size of ours the state’s design and structure provide access to information a challenging task. Any technological innovation that allows for easier access to information must encourage.
Blockchain can easily use to transform and update land records. Government can create a blockchain to make information about land records more easily accessible. This is why a complete prohibition of the most well-known technology (cryptocurrency trends) in blockchain technology may dissuade us from different, more powerful applications.
Treating cryptocurrency as financial assets within a private contracting model is that they are monitored by regulators of capital markets.
Experienced in overseeing different financial instruments and overseeing the exchanges where these instruments trade.Also has experience in designing independent institutions that can offer transparency and risk management guidelines. Definitely necessary related to capital market instruments.
Lack of Support
The importance of not having any support when the cryptocurrency market fails is not understand. However, to use as lessons that can shape us to better. Governments should clearly convey that cryptocurrencies aren’t backed by sovereignty, and they don’t belong in a system of backlogs.
There aren’t any guarantees on investments made, and they are not used as collateral for loans made from any bank or financial broker. The participants in cryptocurrency exchanges must be aware that the investments they make in have particular risks in regards to price and liquidity. The buyer bears his own risk in a loss situation. However, in all situations, that must bear alone. Cryptocurrencies have equal opportunity and risk that are no less big.
Conclusion About Cryptocurrency have Equal Risk and Opportunity
Let the market do the work It is true that cryptocurrencies are a result of the market free. They are instances of capitalization by private parties in where market players are willing to take part and test the limits of the latest technologies. So long as we ensure the stability of our financial system and communicate clearly that the risks of failure in innovation rest at the feet of the market participants, we should let the market take over for us.
The government as well as the Reserve Bank of India should focus on ensuring that the collapse of private contracts in the market will not cause a negative spillover effect. Restrict supervision at this point solely to meet this aim.