Cryptocurrencies: towards an international regulatory regime

Abstract

The key objective of this report is to gain awareness about cryptocurrency, blockchain, and their relationship with microeconomic and macroeconomic advancement and progress. It focuses on integrating the economic, technical, and business aspects of the world of cryptocurrencies. First, we discerned the basic foundational understanding of cryptocurrency and blockchain in terms of similarities, differences, applications and technology usage. Second, we tried to find out the reason of emergence and existence of these concepts and the economic problems that they are targeting to solve. Third, after understanding the basics, we addressed some of the attributes of cryptocurrency and worldwide concerns about these attributes, such as security, regulation, speculative environment, and the impact created due to this. We also touched upon the few associations established by economists and investors about cryptocurrency, the digital and decentralized ledger, with gold standard. Cryptocurrency is gaining momentum in some geographic regions, while facing opposition in others with respect to acceptance and adoption. We tried to look into the regulatory regimes put forward by few countries, banks, and business entities. This helped us understand the roadblocks and welcome moves from different countries and multinational organizations. Some countries are trying to merge existing monetary policies and new cryptocurrency circulation, thus, creating scope for how this combination will be executed. Indian government have shown great interest in scrutinizing the adoption of cryptocurrency. It has been observed that the RBI and the Government of India have fluctuating stances on acceptance of cryptocurrency over the years. Hence, we covered the Indian scenario as well. Government’s increasing concern about money laundering, funding for terrorism, and tax evasion are the major contributors in the same. Apart from economic and transaction-based usage, cryptocurrency provides utmost security of information and, hence, opens various avenues in the socio-political welfare along with economic gain. We have tried to study this phenomenon from an unbiased and open perspective.