Governor of Reserve Bank of India (RBI), Shaktikanta Das raised alarm on cryptocurrencies and cautioned investors on potential pitfalls of digital currency.
Context
Governor of Reserve Bank of India (RBI), Shaktikanta Das raised alarm on cryptocurrencies and cautioned investors on potential pitfalls of digital currency.
Key-Highlights
- In view of macroeconomic and financial stability, cryptocurrencies are a serious concern.
- Governor’s comment has come at a time when the craze of cryptocurrencies has increased among Indian investors,especially the retail ones.
- The craze in India has grown at a furious rate,, after the Supreme Court rejected an RBI order banning cryptocurrency trading in India.
- The Union government has not yet enacted any law on cryptocurrencies. It is currently consulting with an expert. After several rounds of discussion, the government largely wants to set limits on cryptocurrencies trading in India.
What is cryptocurrency?
- Cryptocurrency is a collection of binary data.
- It is designed to work as a medium of exchange.
- In such a system, individual coin ownership records are stored in a ledger.
- Ledger is a computerized database using strong cryptography for securing transaction records.
- Ledger also controls creation of additional coins and verifies transfer of coin ownership.
- Cryptocurrencies are generally fiat currencies because they are not backed by or convertible into a commodity.
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