After fading from memory for half a decade, cryptocurrencies returned as a major investment vehicle, with even teenagers in India saving up pocket money to buy virtual currencies. But it has also been a polarising force with some governments such as Dubai and El Salvador embracing the asset, while the likes of China and Indonesia have banned crypto. India is close to taking a call on its own crypto ban, based on a report by a Financial Stability Board (FSB), but now Singapore says outlawing it isn’t practical.
Protecting investors a priority
Since global investors have lost more than $1 billion to crypto scams in the past year, the monetary authority of Singapore suggests regulations to reduce risks instead of a ban. The organisation’s paper concludes that trading in cryptocurrencies is risky, but a ban isn’t a solution as they are an important part of the digital asset ecosystem. Instead bringing crypto into the mainstream with a regulatory framework, exchanges can be made to ensure transparency by revealing risk exposure.
What’s India’s position so far?
India has already started taxing crypto transactions and profits from trading, but hasn’t taken a decision on the legality of digital assets yet. While the ambiguity leaves investors vulnerable by pushing crypto trading into a grey area, taxes have driven them away from Indian exchanges, towards Binance owned by Chinese-Canadian Changpeng Zhao. The country currently has 10 core crypto owners, which is a third of the global population of crypto investors.
What are the rest up to?
China has cracked down against cryptocurrencies, but has countered their position in the digital space with a central bank digical currency known as the e-Yuan. People in the country embraced the digital asset quickly and it already had an exchange in 2011, before cryptocurrencies were being accepted as payment from 2013, but things have changed in Xi Jingping’s regime.
Iran on the other hand tried to use bitcoin mining to find a way around crippling sanctions, but had to impose a ban when unauthorised mining started consuming too much power, triggering power shortages in the country.
Cryptocurrencies have become an undeniable reality of a digital, connected world, which is why they can’t be left in the shadows, and must be regulated.
