Cryptos have not been the favourite investments for the banks. There is a pending bill for cryptos which hangs like a sword of Damocles. China has already banned cryptos. It has also banned crypto mining. Still, investors here in India have remained unperturbed. They continue to buy and sell cryptos. They use electronic wallets or smaller banks.

Crypto exchanges continue to promote cryptos. One exchange raised money abroad from equity investors. There is an apprehension of the trade being regulated. There is price volatility and accompanying risks. Still, cryptos go down to surge again, making investors sanguine about them. Investors love Powell of the US Federal spelling out his intent not to ban cryptos. They are encouraged by El Salvador making cryptos a legal tender. All are driven by the fear of missing out (FOMD).

In India, RBI is not clear what specific need is met by these private VCs or virtual currencies which legal tender cannot meet efficiently. However, they do not mind the adoption of VCs. As VCs receive acceptance, fiat currency with limited convertibility faces music. Authorities may think of cryptos a fool’s gold, though they fight shy of saying it in so many words. RBI itself plans to launch its digital currency — as good as currency in the electronic wallet.

Almost 1.5 crore investors have put money in cryptos, and the party goes on. They have invested a few billion dollars.

Cryptos essentially are a cocktail of technology and finance. A wrong signal can spoil the party.

Savvy traders can spot buyers overseas in case of a ban as they hold the cryptos in their wallets. Small investors cannot afford this.

To avoid money laundering, all the rules must be spelt out in the proposed bill regarding peer-to-peer transfers and there should be disclosure of crypto holding. There should information-sharing arrangement with foreign traders and bourses.