Even though the government has tried to draft laws regarding cryptocurrency, there are still many issues and challenges regarding it. One of the biggest issue is the absence of clarity regarding cryptocurrency deals.
The uncertainty about how cryptocurrencies are taxed has scared off a lot of investors from getting fully into this area.
Another problem is the high number of scams and dishonest activities happening in the cryptocurrency world. The fact that cryptocurrencies are decentralized and anonymous makes it hard to find and get back money lost to these scams.
This has made both regulators and investors worried about the need for stronger security and ways to protect investors.
However, there are increasing concerns as to how the cryptocurrencies being developed are impacting on the environment, particularly through mining since they consume a lot of energy, especially on proof of work consensus algorithms.
With every adopted crypto or coin, the use of energy is required in boosting the utilization of the involved digital assets at the consequences of environmental degradation.
In India, the use of cryptocurrency is anticipated to increase, along with its compatibility with current financial frameworks, and advancements in technologies like blockchain.
The Cryptocurrency Bill 2021 is currently awaiting approval in the Parliament and could require some time before it is open for discussion.
Although the Indian Government has made progress by implementing a tax on digital assets in the Union Budget 2022, the enactment of a Cryptocurrency Bill represents a major achievement.
