What is crypto leading to in India!
Cryptocurrencies can severely impact any nation because of their vast capitalization. Bitcoin alone has a large capitalization, and apart from that, if you look at the cryptocurrency space, it stands at a market capitalization of more than $3 trillion. So, it is significantly high nowadays, and therefore, if it proliferates highly in any nation, it can have a severe impact. The craze of cryptocurrency started a few years back in India, and after that, it continued growing significantly with Bitcoin Loophole. However, the government may not find it entertaining, but the people are getting huge advantages. On the contrary, some illegal activity carriers like hackers, criminals, and terrorists. Therefore, it has a lot of impact on the financial and every other sector of the Indian economy and needs to be considered as soon as possible.
The status of cryptocurrencies in the Indian economy is not yet defined. Even though there have been many complications regarding cryptocurrencies, recently, the government decided to put some regulations on them. A high amount of tax is imposed on the cryptocurrency income, leading the traders to get out of the market. On the contrary, some traders are not looking forward to leaving the cryptocurrency market anytime soon. They still want to make money out of it, and therefore, they are turning towards illicit activities like tax evasion to secure their money. So, the Indian government faces several problems because of the proliferating cryptocurrencies, but they need to be knocked down at the earliest possible time. A few things that describe what cryptocurrencies are leading to in the Indian economy or explained here.
Reliability and security
The mechanism of cryptocurrencies is considered the most secure globally because they run over Blockchain technology. However, when traders are not entirely informed about everything, things can sometimes take the wrong turn. Even though cryptocurrency and digital transactions make it very easy for people to access money, they are also a common source of funds for hackers and terror financing companies. They can carry out their illegal activities by securely using cryptocurrencies. Also, it becomes difficult for the government to trace back the origin of the transaction, which further gives power to the terrorist organizations. So, to some extent, cryptocurrencies also hinder security at the national level.
The market risk and the speculations of cryptocurrencies make it one of the most drastic investment options. Yes, the crypto coin works all on the mechanism of speculations, and if you are not good at it, certainly you will not be able to make money. So, the Indian government has also been facing many problems in securing people’s money. It purely depends upon the demand and supply mechanism in the cryptocurrency market, and the players find it very difficult to overcome the risk factor involved in the same.
Taxation has been one of the most critical areas of making income for the government. However, using cryptocurrencies on a larger scale makes it difficult for the government to collect them. When more and more people implement the use of cryptocurrencies, the government cannot trace the transaction. Therefore, the income of the people is tough to count and hence, makes it difficult for the government to know if a person has been earning taxable income. As a result, it has been creating a lot of chaos in the country’s taxing mechanism, leading to further financial crises.
Lack of regulations
Even though several legal restrictions have been imposed on cryptocurrencies, they are far from completely regulated. The government has brought about a new bill in the Parliament session that regulates the cryptocurrency transactions and imposes taxes on them, but still, there is a lot to do. Even though heavy taxes have been imposed on cryptocurrencies, people do not refrain from putting money in them and speculating.
Volatility in price
Price volatility has been an important thing that leads to investing more money in the cryptocurrency market. However, the speculations are a dangerous thing. If you are not good at it, you should not put money in the crypto market. It would help if you made sure that the speculations or under your acknowledgment so that you can make money out of it. You must go through all the essential trend analysis methods you can find. But on the other hand, for the government, it is difficult to deal with the volatility. They cannot include cryptocurrencies in anything as their prices fluctuate more than anything else.Follow us on social media