Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
5. In the backdrop of coming of report on digital currencies, assess and account for the implications and threat posed by Crypto currencies to the economy in general and the Indian economy in particular. (250 words)
Reference: Live Mint
Why the question:
High-level inter-ministerial committee on digital currencies submits report, thus the question.
Key Demand of the question:
Discuss in detail the issues and challenges associated with crypto currencies in the world economy in general and Indian economy in particular.
Directive:
Account – Weigh up to what extent something is true. Persuade the reader of your argument by citing relevant research but also remember to point out any flaws and counter- arguments as well. Conclude by stating clearly how far you are in agreement with the original proposition.
Structure of the answer:
Introduction:
Briefly explain what crypto currencies are.
Body:
A cryptocurrency is a digital asset designed to work as a medium of exchange wherein individual coin ownership records are stored in a ledger existing in a form of computerized database using strong cryptography to secure transaction records, to control the creation of additional coins, and to verify the transfer of coin ownership.
Then present India’s stand on Cryptocurrency; The RBI had virtually banned cryptocurrency trading in 2018. The apex bank had certain major concerns over the impact crypto currencies may have on the financial stability in the economy. The Supreme Court had asked the Centre in 2019 to frame policies for crypto, and in 2020, struck down the curbs imposed by the RBI.
Suggest what needs to be done, analyse the pros and cons of it.
Conclusion:
Conclude with way forward.
