Topic : Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
4. What is Virtual currency? Why did RBI ban it? elaborate upon the supreme court judgments in relation to it. (250 words)
Reference: The Hindu
Why the question:
The 4th Global Conference on Criminal Finances and Cryptocurrencies was organized by the Interpol, Europol and the Basel Institute on Governance.
Key Demand of the question:
Discuss what virtual currency is and talk about the RBI ban related to it and SC judgments.
Directive:
Elaborate – Give a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.
Structure of the answer:
Introduction:
Briefly discuss the context – Representatives from 132 countries attended the virtual conference to shape international cross-sector solutions against the criminal use of cryptocurrencies.
The conference’s agenda included trends and investigations on cryptocurrency-related offences, exploring criminal flows and operations in the dark markets, ransomware and sextortion case studies, money laundering involving virtual assets, and the transfer of drug proceeds using cryptocurrencies.
Body:
As of now, there is no globally accepted definition of what exactly is virtual currency. Generally, it is known as a digitally tradable form of value, which can be used as a medium of exchange.
Cryptocurrency is a specific type of virtual currency, which is decentralized and protected by cryptographic encryption techniques. (Ex: Bitcoins, Ethereum, Ripple, Petro, Alber etc.)
In 2018, RBI prohibited banks and entities regulated by it from providing services related to virtual currencies. Discuss elaborately the reasons behind the ban.
Then detail upon the Supreme Court Judgment on Virtual Currencies.
Conclusion:
Conclude with its importance.
