Topic: basics of cyber security; money laundering and its prevention.
5. In India, where the uptake of cryptocurrencies is among highest in world, there is a pressing need to have a streamlined crypto tax regime, constructive and adaptive regulatory environment. Discuss. (250 words)
Difficulty level: Moderate
Reference: Indian Express
Why the question:
On Monday, founder of the collapsed crypto exchange FTX, Sam Bankman-Fried was arrested in the Bahamas. FTX crashed almost overnight after failing to meet a run on deposits, throwing the crypto industry into its latest crisis.
Key Demand of the question:
To write about the need to tax and regulate cryptocurrency.
Structure of the answer:
Begin the answer by defining cryptocurrency with examples.
First, write about the proliferation of cryptocurrencies in the Indian economy and their extent.
Next, write about the challenges associated with cryptocurrencies – taxation, regulation, preventing money laundering etc.
Next, write about the steps that are needed to overcome the above-mentioned challenges.
Conclude by writing a way forward.