Co-founder of the cryptocurrency Ethereum, Vitalik Buterin has donated Ethereum and meme coins Shiba Inu worth $1bn to the India Covid-Crypto Relief Fund. Though considered the largest contribution to the fight against COVID, the gesture has also brought to light the unstable nature of internet currencies and what implications they can have in the Indian economy.
Soon after the release of the amount contributed to the relief work, the currency dropped by almost 30-40% calling in speculations. Also, this made the contributed amount lesser than what was intended. This made the entrepreneur Sandeep Naliwal, who is engaged with the Covid-Crypto Relief Fund to assure the ‘meme currency’ owners that they would uphold the value of community and thus not let them get hurt by any kind of downfall. To make this happen, experts suggest that India shall not liquefy all the crypto-currency donated at once.
These ‘meme currencies’ were initiated as a joke until people like Elon Musk got indulged in its trading and it became an important form of crypto money that is worth billions. However, be it Ethereum and Bitcoin to these Shibu Inu and Dogecoin, lack of any responsible regulatory body and complete control in the hands of private industries that have founded them make them quite volatile and vulnerable. Also, the dangerous world of the internet is the sole medium for these to function; increase the risk. These currencies, in a single moment, can either sky-rocket with more than 100% increased value or hit the bottom plummeting by an even larger percentage. Also, erasing the borders of trading can be an open invitation for the harmful intentions of one country to the other.
Therefore, the Reserve Bank of India doesn’t recognize these crypto-currencies as a valid way for transactions inside India. However, recently the Supreme Court has considered this rule by the RBI as a violation of the ‘Freedom of Choice’ asking it to come up with regulations and guidelines rather than a ban. But weighing the risks these hold against the right to choose by the citizens, putting the economy of a developing nation like ours under the control of these private money forms can have repercussions we can’t afford to take. Therefore, the matter must be taken up by the experts before moving on with an idea. Centre and the RBI are planning to bring a centrally backed crypto-currency for the nation.
Sandeep Naliwal has said that these crypto-currencies reach India after being converted to fiat currency in a hub in the UAE. From there, it reaches the NGOs registered with the Foreign Contribution (Regulation) Amendment Act. While, how would the internet money work out in India is still to be seen, this humanitarian gesture by the crypto community must be thanked. Only when the world comes forward prioritizing well-being and life over things that can wait, we will win this war against the pandemic.
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