Cryptocurrency means different things to different people. It is an object of intrigue, speculation, admiration, confusion and most importantly envy. People believe it is the fastest way to become rich and famous while contrarians believe it is the road to disaster.
Most geographies in the world are still grappling with the legality around cryptocurrency and clarity on the same is yet to emerge. Just last week, The Securities and Exchange Commission (SEC) in the US has come down heavily on two exchanges Binance and Coinbase. In such a scenario, caution should be the buzzword.
As far as India is concerned, cryptos, though traded, are neither legal nor illegal. Exchanges are there but without regulation. This is a big cause for concern because investors are the ones who bear the brunt of any dispute. There is no arbitration.
The tax department does not consider the crypto business as an honourable or a fair way of making or losing money.There is also the 'dark net' where illegal things are available for example banned products and drugs in lieu of a cryptocurrency. The use of cryptocurrencies has also facilitated bribe money payment and underhand activities across countries.
The Reserve Bank of India has at various points of time discussed cryptocurrency but is yet to decide about the strategy. Today, the view is that it would not be permitted in the country and the country would need more time before deciding about it.
At the same time there are a number of cryptocurrencies in India and one wonders how these flourish. They resemble and mimic the movement of penny stocks in the stock market and have a large fan following, the majority of whom are here to make quick money.
Equity markets in comparison are much simpler, with adequate safeguards, a proper mechanism for dispute resolution, system of arbitration and, above all, a powerful regulator in SEBI.With all of the above missing in the case of cryptocurrencies, the investor is always at the mercy of the exchange where he has traded. It's like playing a game of football with one hand tied to the back.
The damsel beckoning from behind a veil is mysterious and hence beautiful but should be left at that. Just because one does not have clarity of legality of bitcoins in India, venturing into the same may not be the best thing to do. It is dangerous as profits and losses are not predictable.
The further one gets caught on the wrong foot with legal issues and in the worst case when you have made money, one can get trapped about illegality or the dark net.In conclusion, cryptocurrencies are best left to the brave, irrespective of the temptation to make a fast buck. Let there be a law on the instrument before you jump onto the bandwagon. As they say, better late than never.