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4) What is a cryptocurrency? Discuss the feasibility of a national cryptocurrency in India.(250 words)

Topic:  Challenges to internal security through communication networks, role of media and social networking sites in internal security challenges, basics of cyber security; money-laundering and its prevention.

Science and Technology- developments and their applications and effects in everyday life Achievements of Indians in science & technology; indigenization of technology and developing new technology.

4) What is a cryptocurrency? Discuss the feasibility of a national cryptocurrency in India.(250 words)

The hindu

Why this question:

Recently, a government panel headed by senior bureaucrat Subhash Chandra Garg placed in the public domain a draft bill calling for a complete ban on private cryptocurrencies in India. The panel recommended a fine of up to ₹25 crore and a jail term of up to 10 years for anyone found to be owning or handling private cryptocurrencies. Thus, the question.

Key demand of the question:

The question aims to analyse the concept of cryptocurrency and its feasibility as a national currency.

Directive:

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction: 

Begin with brief on what is a cryptocurrency – “any information or code or number or token not being part of any official digital currency, generated through cryptographic means or otherwise, providing a digital representation of value which is exchange with or without consideration, with the promise or representation of having inherent value in any business activity which may involve risk of loss or an expectation of profits or income, or functions as a store of value or a unit of account and includes its use in any financial transaction or investment, but not limited to, investment schemes.”

Body:

Discussion should include the following: 

Explain the context of the question – Inter-Ministerial Committee on Virtual Currencies headed by finance secretary Subhash Chandra Garg has submitted its report to the government. The committee set up by Centre has also proposed a draft bill ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill, 2019’.

Discuss what are the key recommendations made, discuss pros and cons and form a fair and balanced opinion as to whether the currency should be allowed or banned completely.

Conclusion:

Conclude with way forward.