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Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
4. Elaborate on the significance of crypto assets in the present global financial dynamics and the need for its regulation in the Indian markets. (250 words)
Difficulty level: Moderate
Reference: Live Mint
Why the question:
India is emerging as a cryptocurrency hub in the recent times.
Key Demand of the question:
To bring out the key potential of crypto assets and blockchain technology and the need for a smart regulation of the same.
Directive word:
Elaborate – Give a detailed account as to how and why it occurred, or what is the context. You must be defining key terms wherever appropriate and substantiate with relevant associated facts.
Structure of the answer:
Introduction:
Begin by highlighting some of the benefits of crypto assets that they make finance more inclusive and decentralized.
Body:
First bring out the trend of major financial institutions and investors adding cryptocurrency as part of their assets and also the high accountability mechanisms associated with the blockchain technology and its applicability, scalability and security in the Banking, Finance and Insurance sectors.
Next, stress on the need for a robust and smart regulatory mechanism such as safeguards against mis selling, Investor protection, introduction of KYC norms for crypto asset holders to avoid money laundering, clarifying the tax regime on crypto assets etc
Conclusion:
Conclude by stating that the benefits of crypto assets and blockchain technology can be reaped constructively only with a robust regulatory regime.
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