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Time has come to regulate crypto currencies not resist it. Critically analyse.

Topic:  indigenization of technology and developing new technology.

6. Time has come to regulate crypto currencies not resist it. Critically analyse. (250 words)

Reference: Business Standard

Why the question:

Bitcoin’s rally in 2020, rising 1.5 times so far this year, has piqued investors’ and financial services providers’ interest. And Indian banks are taking note as the crypto currency nears its all-time high of $20,000.

Key Demand of the question:

To argue for enhanced utilisation of crypto currencies in the banking sector.

Directive:

Critically analyze – When asked to analyse, you have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgment.

Structure of the answer:

Introduction:

Define crypto currencies and give the context where the performance of Bitcoin in 2020 has piqued the interests of Indian financial service providers.

Body:

Cite facts and figures that encompass the good performance of crypto currencies and the benefits it can accrue to the Indian financial sector.

Mention the developments so far in India with respect to crypto currencies: the revocation of banking ban in March 2020.

State reasons why India should to be more accepting of crypto currencies and the need to move to regulate the sector than resisting.

Bring out the potential challenges in implementation of large scale crypto currency based assets. Also, highlight the inadequacies in the Indian financial system pertaining to crypt currencies.

Conclusion:

Conclude with balanced way forward.