about 2 months ago
Volatile Nature: Cryptocurrency is speculative. Investing in high amounts leads to Market Volatility, meaning prices fluctuate and people may suffer big losses as a result. Reliability and Security: Cryptocurrency for its characteristic of be a digital mode of transaction, it has become a very common platform for hackers, terror finance, and drug transaction. This has brought tiredness among the people to a larger extent as it brings lesser security and lack of reliability. For example, Wannacry virus was used by criminals to make ransom payments in Bitcoin. Lack of Regulatory Framework: The Indian government is following a wait and watch policy towards cryptocurrencies. Absence of regulatory authority has led to increased chances of fraud threat to investor protection and movement of money in the economy. Flooding Advertisement: There has been an explosion of advertising in the crypto market to lure people into speculating, because it is seen as a quick way to make money. However, there is concern that these efforts are to mislead youth through “overpromising” and “non-transparent advertising". Stock-Market Issues: The Securities and Exchange Board of India (SEBI) has pointed out that it does not have control over cryptocurrency "clearing and settlement" and cannot provide counterparty guarantees as it does for stocks. In addition, cryptocurrency has not been defined as either a currency, commodity, or security. Scalability Concern: The scalability of crypto remains a major concern, since it is based on blockchain technology. In blockchain technology, the data storage mechanism is append-only, that means it cannot be modified, and since the demand is growing, storage capacity remains limited. Money Laundering: There is a huge possibility that people might start investing in money laundering and it is very easy as one can send money from country to country without any accountability. Possibility of Economic Disbalance: Rising crypto currency market can disbalance the circular flow of money in the Indian Economy. The creation of cryptocurrency is very different from how actual cash is created in the economy.
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