Cryptocurrency Exchanges are the have recently become the new playgrounds of young India especially the Young Technocrats and investors. Crypto-currencies have been in many industries for more than 10 years, it has seen more frenzy in the past one year with the price of Bit-coins the most prevalent of cryptocurrencies, appreciating to dizzy heights.
At present these crypto-currencies have suddenly become the flavor of the season between the Young Technocrats and New Generation investors. Every conversation seems to be about crypto-currencies, smart contracts and block-chain-based applications and the legal and taxation framework in which these currencies function.
Besides the Fiat currencies which are delivered by the Central Bank of a Country, the Cryptocurrency exchanges function on a decentralized computing network to form an agreement on the exchange without any central controlling authority. It operates on simple mathematical regulations that everybody contributing in the network agrees on which called blockchain is held on a network of millions of servers and computers on the internet, which is a public transaction database, working as a public distributed ledger.
When one buys a crypto-currency one pays for it either through another crypto-currency one already holds or through a fiat currency and in return gets a unique program code being the private key underlying the currency.
The Finance Ministry is doubtful about cryptocurrency exchanges because of its characteristic nature of secrecy, ease of transferability, and potentiality for being used for unlawful activities similar to a Ponzi scheme. As per the news revealed in Live Law, the government by bringing in suitable legislation can solve the areas of concern. The Government can command the crypto-currency exchanges operating in their countries to register themselves, classify and confirm users, maintain records, and comply with government reporting obligations. In such a method, the country can advantage from the economic activities.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]