A prohibition would deprive India, its businesses, and people of a transformational technology that is being quickly embraced throughout the world, including by some of the world’s greatest corporations like Tesla and Mastercard. It will rob over fifty lakh Indians of one of the largest wealth-creation possibilities of the coming decade by erasing vast sums of money invested in cryptocurrencies.
By banning cryptocurrencies and failing to regulate them, a parallel economy will emerge, with illegitimate applications (such as criminal trading or money laundering) increasing and lawful ones disappearing. When the RBI placed a banking ban on crypto-businesses in 2018, the country’s leading crypto-startups were forced to shut down. And all cryptocurrency trade has shifted away from reputable and sophisticated crypto-exchanges that adhere to precautions including thorough know-your-customer (KYC) checks on dealers, anti-money laundering procedures, and transaction logs. Instead, in Telegram channels, over-the-counter platforms have popped up that trade in cash and keep no records.
There is concern that dealers would buy cryptocurrencies with unauthorized funds and then utilize them for illegal operations. Even if cryptocurrencies are outlawed, this anxiety persists. In any event, anybody may buy cryptocurrency on the internet. Cryptocurrency, on the other hand, is beneficial for preventing and tracing crime since it creates a public record of every transaction. The FBI, for example, was able to discover and shut down a child pornography website named ‘Welcome to Video’ utilizing the bitcoin transaction trail. By tracking the site operator’s personal phone number and email address, the FBI was able to link the transaction to him. Merkle Science, a Singapore-based start-up formed by Indians, aids law enforcement agencies and regulators in investigating illegal cryptocurrency transactions and doing due diligence on crypto exchanges’ best practises.