The monetary policy of India must prepare and anticipate for the challenges posed by the crypto currencies. Evaluate (200 Words)
Refer - Indian Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· The ongoing technological revolution has meant that “digital money” one manifestation of which are cryptocurrencies.
· Widespread adoption of privately issued digital currencies as a medium of exchange will have much the same impact.
· The larger the monetary base they cannibalise, the less potent will be domestic monetary policy in responding to business cycle needs and external shocks.
· The intellectual case for Bitcoin stemmed from the fear of debasement of fiat currencies through an unprecedented expansion of G3 central bank balance sheets after the global financial crisis.
· As the IMF points out, if cryptos are only used for “niche purposes” narrow cross-country transfers and remittances which are then quickly converted back into local fiat currencies, the implications for monetary policy will be contained.
· The greater the substitution into digital currencies the more the loss of seigniorage revenues to governments from the monopoly issuance of fiat currency.
· Separately, fiscal revenues can also be adversely impacted by the increased tax evasion opportunities that crypto-currencies can facilitate.
· All told, the macro implications of widespread crypto adoption are complex and interlinked. But the true macro challenge will emerge and compound if and when unbacked private digital currencies are seen as viable mediums of exchange.
mahendran 3 years
please review
IAS Parliament 3 years
Try to cut short the introduction part, avoid lisiting out points and try t explain them, bring coherence in theanswer. Keep Writing.
K. V. A 3 years
Pls review
IAS Parliament 3 years
Good attempt. Keep Writing.
RAJA MOHAMED 3 years
Please Evaluate
IAS Parliament 3 years
Try to explian the flowchart nd include data to support your answer. Keep Writing.
