Sumary of Cryptocurrencies a bad omen for gold:
- In past few years, the Government of India has made significant efforts to encourage people to own gold in a non-physical form, through sovereign gold bonds (SGBs).
- In recent years, digital gold has also gained in popularity due to its ease of transaction, and holding.
- More Popular Than StocksTo achieve a ‘currency’ status, cryptocurrencies would need to gain much wider and deeper acceptance;
- It is estimated that there are over 100 million people in India owning one or more cryptocurrencies;
- This number is materially higher than the number of people owning publically-listed shares in India.
- Regulating CryptocurrenciesThe government has proposed to introduce ‘The Cryptocurrency and Regulation of Official Digital Currency Bill 2021’ in the winter session of Parliament to regulate cryptocurrencies.
- It aims to “create a facilitative framework for creation of the official digital currency to be issued by the Reserve Bank of India”, and prohibit private cryptocurrencies, with certain exceptions to promote the underlying technology and its uses.
- Earlier, a high-level inter-ministerial committee suggested a ban on private cryptocurrencies, except any virtual currencies issued by the State.