Cryptocurrencies and creating a comprehensive regulatory framework to govern their use. The Anxieties Surrounding Regulations. The government must be extremely cautious when drafting regulations pertaining to the cryptocurrency regime in India, as the blockchain mechanism provides for significant opportunity to float responsibilities. For example, the government’s recent tax policy resulted in offshoring of domestic business and liquidity to foreign exchanges, causing great distrust in tax revenues and a decrease in transaction traceability. The government should be aware of the information asymmetry among cryptocurrency investors, as the blockchain employs economic incentives to motivate network members to certify every transaction, distinguishing them from digital versions of fiat currencies.
A blanket prohibition would be counterproductive because there are numerous service providers available to deposit money transferred abroad in a business that invests in cryptocurrency markets. and a narrow exit encourages private cryptocurrency investments, which may later result in collateral damage to individuals/organizations. Tax evasion will result from difficulties in characterizing cryptocurrency. Fraudsters promise high returns through the whatsapp mobile number list use of a unique trading system and, on occasion, initial coin offerings, which are generally Ponzi Schemes. Similar concerns exist regarding corporate laws, payment systems and banking, securities, and other commercial laws; additionally, consumer protection must be addressed, and current laws may need to be revised in light of this innovation.
The promised anonymity serves as a conduit for money laundering, tax evasion, and funding illegal activities such as sex trafficking, child exploitation, corporate espionage, illicit cross-border drug trafficking, and direct and indirect funding to terrorism. Because the market is dominated by private players, there is a distinct lack of sovereigns, leaving no entity to prosecute or summon in legal disputes. An Apparatus for the Regulation. The Indian market is an ideal setting for a new frontier for the cryptocurrency trading business, with its young and aspirational population.