Cryptocurrency critics and supporters will continue to watch how it fares once bitcoin is recognized in El Salvador.
Crypto should be treated as a separate asset class
BitCoin News India: The Central American country of El Salvador has legally accepted bitcoin last week. Bitcoin can also be used for financial transactions in El Salvador. El Salvador is the first country in the world to do so.
Cryptocurrency critics and proponents will keep an eye on how it fares once bitcoin is recognized in El Salvador. However, due to technical constraints, the use of bitcoin has not started in the country.
The result of the El Salvador experiment
The eyes of the world are now on the result of the use of bitcoin in El Salvador. The Central American country believes that recognizing bitcoin can help in financial inclusion in the country. In El Salvador, 70 per cent of the population is out of the banking business and the government is making strenuous efforts for financial inclusion. Despite all this, concerns about bitcoin continue. Due to the huge volatility of bitcoin in comparison to the currency of a country, it is not being accepted.
Bitcoin can also be used for financial transactions in El Salvador.
In El Salvador, 70 percent of the population is outside the banking business.
What is bitcoin?
Bitcoin is created by a computer following a complex process. In simple words, bitcoin is prepared after complex mathematical calculations with the help of special software in the computer. Bitcoin does not become valuable just because of the currency emanating from the computer. Because of the limited number of bitcoins available and more and more people wanting to buy it, its value increases.
World Bank rejected
The World Bank has rejected El Salvador’s application to help launch bitcoin. The IMF has said that cryptocurrencies like bitcoin pose a major threat to the financial stability of a country.
India is confused at this time?
At present, the regulator in the country is zero on cryptocurrencies. In the year 2018, RBI banned banks and financial institutions from dealing in cryptocurrencies. In March 2020, the Supreme Court lifted this ban. After this, banks like SBI and HDFC had also warned their customers about dealing in crypto.
Bitcoin is not illegal in India
It is not illegal to trade or hold bitcoins in India at this time. Many policy makers believe that crypto should be treated as a separate asset class.
Government committee wants to ban
In February 2019, a government committee suggested a ban on crypto. This panel had said that this virtual currency issued by private individuals has no validity. Along with this, many other risks associated with bitcoin were also told.
Can bitcoin be banned in India?
The Indian government had proposed a law to ban crypto in the budget session this year. Till now the matter has not progressed on this. There is a lot of lobbying going on in the country for the recognition of crypto currency. Recently, Finance Minister Nirmala Sitharaman said that a bill related to crypto has been sent for cabinet approval. There are indications that cryptocurrencies may be banned in India.