- Bitcoins or crypto-currency has always been in a trend, but since Tesla, an Electric Car manufacturing company, invested $1.5 billion in Bitcoins makes the topic hotter.
- The news caused the price of Bitcoin to jump 17%, a record high.
- In the recent official statement of Tesla.
- It said, the company is going to update its investment policy and now want to invest in “reserve assets” such as digital currencies, gold bullion, or gold exchange-traded funds and also planning to accept bitcoins as payment for its cars soon.
Tesla had already bought $1.5bn of Bitcoin and could “acquire and hold digital assets” in the future also.
So, what makes a Multi-billion company change its financial policies? As per the expert’s opinion, crypto-currency could be a future currency. This statement is strengthened when we see the recent investments made by major financial institutions. Except for Tesla, the world’s largest Asset Management Co. BlackRock has “started to dabble” in bitcoin.
According to Rick Rieder, who is a Chief Investment Officer in BlackRock, the company has begun to enter the bitcoin space.
Other giant financial institutions like BNY Mellon and Mastercard have also made their presence in the crypto-currency world recently. Accept this, there is another side of a coin. The Governor of Bank of England, Andrew Bailey cautioned over bitcoin’s use as a payment method. He said the central banker’s line against cryptocurrency proliferation at the Davos conference in January 2021. As per him, the problem rests with value and volatility. He is concerned about the stability of the medium, which crypto-currency lacks.
Also, in India Reserve Bank of India (RBI) had banned banks from processing transactions related to crypto-currency in 2018. The Supreme Court, vide judgment dated March 4, 2020, lifted the ban and legalized the crypto-currency again in India.
However, the Indian Government is planning to introduce a new bill on cryptocurrency (Cryptocurrency and Regulation of Official Digital Currency Bill, 2021) in the on-going budget session.
As per Finance Minister Inter-Ministerial Committee (IMC) suggested a ban on Cryptocurrency like Bitcoin. Additionally, the same committee has pitched for the introduction of an official digital currency that will be regularised by the Reserve Bank of India. So, as per the current scenario, the future of Bitcoins in India is not certain and it is a subject matter of Government policy. Many countries like China, Russia, Vietnam, etc. where cryptocurrency is banned and not legitimate as a payment method. Where else many developed countries like the USA, Australia, Europe union provided a free flow of bitcoins.