Topic: Challenges to internal security through communication networks, the 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 need for the formulation of a clear, constructive, and adaptive regulatory environment for cryptocurrencies in India. (250 Words )
Level: Moderate
Reference: The Hindu, Indian Express
Why this question:
Recently, a government introduced a bill in the parliament to regulate cryptocurrency in India.
Key demand of the question:
The question aims to analyze the concept of cryptocurrency and its regulation.
Directive:
Discuss – This 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 a 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 an exchange with or without consideration, with the promise or representation of having an 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:
Highlight the issues that the use of cryptocurrencies creates for regulators.
Also, mention the benefits that it provides. Then mention why it needs to be regulated. You should mention the findings of RBI, Garg Committee (2019) as well as the government on cryptocurrencies.
Conclusion:
Conclude with the way forward.
