Difficult To Ban Cryptos Outright, Says Cryptocurrency Expert

Cryptocurrency is a global phenomenon that has competed with the Covid-19 pandemic to grab global headlines over the last one year. India, needless to say, hasn't been untouched by the cryptocurrency rage. Several media reports suggest that India has 8 to 10 crore cryptocurrency owners, the highest in the world..But with the government planning to regulate cryptocurrencies, what the future holds for them remains unclear..NDTV spoke to crypto veteran Michael Terpin, Founder and CEO of Transform Group, a leading global blockchain advisory and PR company, on the increasing push for banning or regulating cryptocurrencies, the top trends in the sector, the future of cryptocurrencies and much more..Here are the edited excerpts of the interview..India is set to introduce a Bill in the Parliament to regulate cryptocurrencies and ban private cryptocurrencies. What's your take on it? .Regulations are everywhere in the world. The point is how over-reaching are the regulations. Overregulation, in fact, may hamper the upcoming sector's growth. If governments have over-reaching regulations, people may simply ignore them and continue using cryptocurrencies. For instance, Nigeria banned cryptos but their popularity hasn't dipped. It is difficult to outrightly ban cryptos. For that, one would have to shut down the internet. Governments don't like to be ignored. Ultimately, they will probably do what is in their interest like taxing or adoption etc. .A former RBI governor has suggested that crypto can remain as an asset class but not as legal tender. Your take? .Cryptocurrencies are an asset class like gold and securities. They are similar to stocks – you buy and sell them, and there is a ‘smart contract' between a buyer and seller. In fact, one can say that cryptocurrencies are like digital gold – one can buy any amount and keep them safely. .What are three trends you are seeing in the crypto industry? .Adoption in emerging markets is one trend. Countries like El Salvador and Argentina where high levels of inflation has been a problem are switching to cryptocurrency. El Salvador has already done that. I believe cryptocurrencies will see the end of the US, G20 and European Union influence on emerging markets. .DeFI (decentralised finance) is revolutionising the finance world, eliminating intermediaries like banks and brokers. In the future, financial markets too will join the revolution and offer ‘DeFi funds'. DeFi provides high interest to savers and people can borrow from DeFi markets at low rates. Around $70 billion is now locked in DeFi markets and the figure will touch $1 trillion soon. .Third developing trend is non-fungible tokens (NFTs). We have seen a 1,000 per cent rise in NFTs in the last one year, even more than bitcoin. NFTs are changing the way artists are making money. NFTs have eliminated middlemen like agents in the industry. Artists have become their own distributers, reaching out to buyers directly. The internet empowered writers. NFTs will now empower artists. .Many say cryptocurrencies are a bubble? As an industry veteran what do you have to say? .Cryptocurrencies are here to stay. Bitcoin and ETH are not scams. They are the safest way of entering the market. You may hold and store for value and sell them whenever you want. They can be your savings account. In fact, cryptocurrencies are still where the internet was in 1997. There's a lot of evolution to happen. Even the crypto wallets will undergo changes. Look at Bitcoin, which was about $5 in 2011 and is now at $55,000. It will be at half a million in the next 10 years. In 20 years, a vast majority of the world will be using cryptocurrencies. .Many central banks have plans to launch Central Bank Digital Currency (CBDCs), reportedly inspired by bitcoin, Are they a threat to cryptocurrencies? .We can't call them cryptocurrencies at all. Cryptocurrencies are basically decentralised. Here the central bank will control everything. Also, scarcity brings that appeal to cryptos like bitcoin. There are only limited quantities of bitcoins. But the central banks can mint as much CBDCs as they want. .Crypto mining has been criticised for being environmentally unsustainable. .That's a false notion. Seventy-four percent of mining uses renewable energy, which is a cleanest and least expensive form of energy. ATMs and gold mining are more power guzzling than crypto mining. In fact, there are bitcoin miners who are also earning through selling their unused electricity to the power grid! .Do you see cryptocurrencies having a future in India, where there is low financial and digital literacy, especially in its hinterland? .I am sure that at least one person in a village has a smartphone and active internet. That is all one needs. He or she can become the village's crypto evangelist. Moreover, I believe the large Indian population abroad can help cryptocurrencies grow in India, if they begin to send remittances via crypto. .What is the one advice you will give to youngsters who are or will enter the crypto market? .Stay away from garbage coins that promise unreal returns. People generally lose money or fall for scams when they are buying something they do not know. So, it's important to conduct a thorough research before buying any cryptocurrency.

Difficult To Ban Cryptos Outright, Says Cryptocurrency Expert

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP