Cryptocurrency: Why Indian government is banning it?

Cryptocurrency is defined as a type of currency that can be controlled by any Government, but it does not come under any governmental institution like the central bank of a country

Cryptocurrency: Why Indian government is banning it?
Aabid Gull.

Authored by Aabid Gull, MCA Student

Cryptocurrency is defined as a type of currency that can be controlled by any Government, but it does not come under any governmental institution like the central bank of a country. Cryptocurrency is also called a digital asset or digital money because its operations or transactions are happening online not offline. In comparison to traditional money, cryptocurrency has the disadvantage of liability whenever there is an incomplete transaction no one is responsible for the loss. There is not any kind of third party involved while making online transaction using cryptocurrency. Recently Indian Government had raised some concerns with the cryptocurrency, now the main question is why Indian Government is not happy with the Cryptocurrency? Also let’s take a look at the working process, benefits, as well as risks of the cryptocurrencies.  
In recent years one form of the currency that has caught the attention of the people is cryptocurrency, many reasons are responsible for such kind of attention one of them is non-interference of the third party. Cryptocurrency uses the latest technology in current time of period and functions in the same way as a traditional money exchange system. [1]. Nowadays cryptocurrency has become an asset similar to other assets that are present in society. Market of the cryptocurrency is said to be increasing day by day so the numbers of users are increasing. The price of the these currencies are at the higher level but the problem is that is remaining consistent, best example of that would be the price of Bitcoin in April 2021, at that time the price of the bitcoin jumped to the more than 64,000 USD that was the increase of 224% than older price in the earlier period of time, but after that prices fell drastically by 50% to 32,000 USD in that summer period of the year. Although bitcoin recovered its value and again jumped to almost 40,000 USD in the autumn of 2021. The last price of bitcoin was reported around 42,000 to 43,000 USD in the month of November of this year 2021. Different countries are now trying to create their own cryptocurrency in order to get the maximum advantage for their future. Other major developments that are happening and many countries are starting to adopt it as their legal currency or legal tender. Earlier in June of this 2021 El-Salvador became first country to adopt the cryptocurrency (Bitcoin) as their legal tender, now it can be used in business transitions, In fact it should be noted US dollar will remain continue in use as their primary currency. History of Cryptocurrency started with the Bitcoin around the year 2009 and after that other crypto currency got also developed and came in the market since and are getting investment by a lot people [2].
How does a cryptocurrency work?
The way cryptocurrency work are going through different processes which include cryptography, blockchain, decentralized control, private keys, miners, finite supply, cryptocurrency exchanges.. According to some experts block chain is the main technology or pillar on which cryptocurrency is dependent, Blockchain is a decentralized technology that has been distributed on many computers which are responsible for managing and recording transactions. [3]. [1], [2] and [3] discussed the various regulatory options and frameworks that could be applied to cryptocurrency regulation because of their decentralized nature.
Why does India government hate the cryptocurrency?
One of the most common reasons for disliking of Cryptocurrency by any Government in the world and for Indian Government particularly would the not controllable transactions of these cryptocurrency and it has turned to be involved in various scandals and other reason has emerged usage of these cryptocurrencies. Because of cryptocurrencies, criminals have no trouble in illegal transactions. [4]. Also cyber criminals are also preferring this type of currency and the problem has been rising, When ransomware attacks happen, after which the attackers used to get ransom from victims was Bitcoin that is a cryptocurrency. It being a non-volatile asset that presents risk for financial because of exposure increase, bitcoin, dodge, and other currencies are possess the same risks, for bank that would be one of the most serious riskiest assets that it can hold. Other fact why Indian government has RBI concerns about the anonymity of the transactions and also in getting difficulty in tracking the source of money. institutions But all the institutions are not sharing the same view about some companies, believe instead of applying harsh ban on crypto currency the Government of India should regulate these kinds of regulations and also issue guidelines. More than ever, frauds are happening and have happened whether done by politicians, Businessmen, Criminals. Absence of any stringent guide lines central bank or may be government could be a particular problem for Indian government has complicated relationships with crypto currencies. 
As cryptocurrency has been a digital asset and untraceable that is going under it. First major increase of Crypto currency happened during the year 2011 when its value rose from 1 USD to almost 32$. Market of cryptocurrencies is growing rapidly in India and in the rest of the countries also. For now, it seems that RBI's guidelines are working as cryptocurrency investors and exchanges have adopted or perceived the guidelines as a stamp of approval. With the use of cryptocurrencies the settlement of money is instant and easy. In terms of assets many people don't understand properly how they can use them for their future benefits. The Year 2021 has become a major event of turning point for cryptocurrencies as in this year the people have crypto like Bitcoin rising to its maximum value from its beginning and after that falling to half of that maximum value within a month of this Year.   
[1] Y. Liu and A. Tsyvinski, "Risks and Returns of Cryptocurrency", The Review of Financial Studies, vol. 34, no. 6, pp. 2689-2727, 2020. Available: 10.1093/rfs/hhaa113 [Accessed 10 December 2021].
[2] V. Chauhan and G. Arora, "A review paper on cryptocurrency & portfolio management", 2019 2nd International Conference on Power Energy, Environment and Intelligent Control (PEEIC), 2019. Available: 10.1109/peeic47157.2019.8976592 [Accessed 10 December 2021].
[3] D. Valdeolmillos, Y. Mezquita, A. González-Briones, J. Prieto and J. Corchado, "Blockchain Technology: A Review of the Current Challenges of Cryptocurrency", Advances in Intelligent Systems and Computing, pp. 153-160, 2019. Available: 10.1007/978-3-030-23813-1_19 [Accessed 10 December 2021].
[4] V. Chakravaram, S. Ratnakaram, E. Agasha and N. Vihari, "Cryptocurrency: Threat or Opportunity", Lecture Notes in Electrical Engineering, pp. 747-754, 2020. Available: 10.1007/978-981-15-7961-5_71 [Accessed 10 December 2021].