A recent United Nations (UN) report stated that more than seven percent of the Indian population owns digital currencies. Digital currencies are often cited as a financial inclusion tool that has the potential to change the global financial infrastructure. The adoption of digital currencies has increased the challenges in terms of the need to balance accountability, privacy and transparency. “Till date, about 46,000 people have reported cyber fraud related to this domain. Users can enable two-factor authentication on all wallets. Meanwhile, businesses can be vigilant against such threats by applying security measures and maintaining blockchain records.Protecting networks through setting up firewalls and encrypting information will minimize the risk of cyber criminals, who intend to access information confidential,” Vikram R Singh, founder and CEO of Antier, a blockchain development and consulting firm, told FE Digital’s Currency.
According to industry experts, privacy is a big concern and the world needs global cryptocurrency regulation. This is to eliminate the possibility of regulatory arbitrage. “Such legislation will particularly help those that target financial crimes. The Indian government is looking to explore the idea of a national digital currency and its integration into governance. If digital currencies held by central banks are allowed, central banks will be able to monitor and control every transaction. The introduction of Central Bank Digital Currency (CBDC) is expected to bring transparency to the industry,” said Punit Agarwal, Founder of KoinX.
Additionally, as virtual assets are stored in decentralized ledgers, there are risks of unauthorized transaction execution that falls outside of any regulatory framework. “The Securities and Exchange Board of India (SEBI) and the Reserve Bank of India (RBI) have also raised concerns about the regulation of virtual assets in India,” said Dileep Seinberg, Founder, CEO of MuffinPay, a company bill payment and utility cryptocurrency. Additionally, market regulators believe that additional information is needed to determine whether or not virtual currencies can formally qualify as securities. “Even SEBI has indicated that one goal of bringing cryptocurrency trading platforms under regulatory scrutiny could be to offer a Know Your Customer (KYC) mechanism; the same can be ensured by registering businesses as authorized money changers and dealers,” Singh added.
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