Crypto Awareness Campaign

The Investor Education and Protection Fund (IEPF) will launch an outreach program soon to create awareness of cryptocurrencies.


  • A cryptocurrency is a digital asset that is kept in computer databases.
  • To keep these digital coins secure, they are recorded in digital ledgers using strong cryptography.
  • The ledgers are distributed globally, and each cryptocurrency transaction is codified as a block.
  • On the distributed ledger, multiple blocks are linked together to form a blockchain.
  • More than 47 million cryptocurrency users are estimated to exist worldwide.
  • Mining is the process by which these cryptocurrencies are created.

What is the source of the concern about cryptocurrency?

  • Caution from the RBI: The Reserve Bank of India (RBI) has suggested that legislation on the sector be drafted. It believes that cryptocurrencies should be banned.
  • The crypto dilemma stems from concerns that an unregulated currency will destabilize a country’s monetary and fiscal stability.
  • Involved in illegal activities: Crypto exchanges in India are also being investigated for alleged involvement in illegal activities such as drug trafficking, money laundering, violating foreign exchange legislation, and GST evasion.
  • High volatility: Because cryptocurrencies are extremely volatile and work around the clock, investing in them can be a complex and risky endeavor.

Will an outreach program be beneficial?

  • Regulation is required: Aside from the outreach program, the crypto sector requires a regulatory mechanism.
  • The messaging must be correct: If the government takes a heavy-handed approach and declares that virtual currency is not legal in India, this will not be entirely accurate.

India’s current regulatory framework

  • The Reserve Bank of India has prohibited banks and other regulated entities from supporting cryptocurrency transactions.
  • The government has confirmed that cryptocurrency mining costs are considered capital expenditures rather than acquisition costs.
  • The Centre introduced the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021.

Way ahead

  • Because crypto assets have no borders, any legislation (whether for regulation or prohibition) would necessitate international cooperation to prevent regulatory arbitrage.
  • The collaboration must include an assessment of risks and benefits, as well as the evolution of a common taxonomy and standards.
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