Current trends and future scope

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As soon as we hear Crypto Currency; likewise, thoughts can begin to float through the mind with almost no specific rules, regulations, and policies. Most investors see it in a different way, especially part of the organized market and a semi-ethical tradable instrument. As a development practitioner, I see it from a different perspective in terms of technology-driven finance, carbon emissions, and cross-border trade.

Countries like El Salvador have legalized all cryptocurrencies, while China has banned them in all forms. India offered a digital rupee option, with an anecdote of its promise to digital finance. India has announced that it will levy a fixed tax of 30% on all income made through cryptocurrency transactions, a kind of pseudo-acceptable activity. To manage the risks associated with losses incurred when trading these currencies, the Ministry of Finance has made it clear that these losses cannot be settled with other income, protecting the financial system and its stakeholders, who are not part of of the world of virtual currency.

The amount of energy involved in mining Bitcoin and other cryptocurrencies is enormous, data suggests Bitcoin mining uses 0.5% of total electricity consumption, consuming energy produced from fuels that warm the planet. This gave another insight to clean energy experts, who proposed that if Bitcoin is produced from renewable energy resources, it can also become a tradable instrument to offset carbon emissions. Technically making cryptocurrencies greener and cleaner, any carbon-emitting industry can buy green cryptocurrency and offset their carbon emissions.

Development finance can be seen as a game changer as it can be used to finance a development program without any entry or exit policy for any investor. This can make crowdfunding or diaspora funding too easy, simply one can invest in ongoing development projects in any part of the world. This will make the currency more impactful, perhaps an era of Impact Crypto Fund is coming, with huge potential to change the livelihoods and development landscape of any developing country.

It is believed that countries with low growth rates and large sovereign debt may allow Crypto as legal tender, while developed countries may consider their own version of Crypto or Asset Backed Crypto for better valuations. Rising cases of electricity outrage may push Crypto towards using a renewable energy source for mining Crypto Currency.

A lot is happening, now we know where it all leads, but one thing is sure, no one can ignore it now!

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The opinions expressed above are those of the author.

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