Should cryptocurrencies be regulated in India?

If yes, how should they be regulated? These are the 2 questions that are all over the news today.

We live in a world with 13,000+ cryptos with a market capitalization north of $2 trillion. There are hundreds of billions locked up in DeFi (Decentralized Finance) applications.

The use of cryptocurrencies in darknet markets, money laundering, ransomware, and terrorism financing is growing. Fraud and theft on decentralized finance platforms are massive and have exceeded $10.5 billion in 2021.

There is no doubt that cryptocurrencies must be regulated. In my opinion, India must define and regulate cryptos based on what they "do" and not based on what they "are". Contrary to popular belief, most cryptos are not "currencies". The most basic categories of cryptos are:

1. Ready money cryptos - These are "pseudo-anonymous" cryptos like Bitcoin and also fiat-pegged stablecoins like USDT. These should be regulated by the Reserve Bank of India (RBI) under a special law.

2. Privacy coins - These are "anonymous cryptos", like Monero, and the most misused. They should be banned.

3. Utility coins - These power specific projects, applications, or blockchains e.g. ETH and should be regulated by the RBI as pre-paid instruments.

4. Non-Fungible Tokens (NFTs) - These should be regulated by the Intellectual Property regulators – copyright, trademark, patent, etc.

1. What is Terra (LUNA)?

Name: Terra

Symbol: LUNA

Overview:

Terra is the 5th largest Decentralised Finance (DeFi) blockchain - after Ethereum, Binance, Solana, and Avalanche. The total value locked (TVL) in Terra is almost $11 billion.

The top 5 DeFi protocols that run on Terra are:

	Anchor (ANC)
	Lido (LDO)
	Mirror (MIR)
	Terraswap
	Pylon Protocol (MINE)

Terra is an open-source public blockchain protocol for algorithmic stablecoins. It enables the creation of fiat-pegged stablecoins that can be spent, saved, traded, or exchanged on the Terra blockchain.

The protocol consists of 2 main tokens:

	Terra stablecoins: These are stablecoins that are minted by burning Luna.
	Luna: This is the protocol's native staking token that is used for governance and in mining.

2. Metrics

As of 30 November, its core metrics are:

Price metrics

Supply metrics:

Note:

	Circulating Supply is the number of coins / tokens in public hands.
	Total Supply is the number of coins / tokens created minus the number burned.
	Maximum Supply is the maximum amount of this crypto that can ever exist
	Figures have been rounded off for convenience

Marketcap & Volume metrics:

Note:

	Market cap = Current Price x Circulating Supply
	Fully Diluted Market Cap is the market cap if the maximum supply was in circulation
	Volume (24h) is the fiat value of this crypto traded over the last 24 hours
	Volume / market cap ratio = 24h Volume / Marketcap
	Figures have been rounded off for convenience

3. Wallets

Trust Wallet is popularly used for Terra (LUNA).

Note: The data/graphs are from CoinMarketCap, Messari, and Future Money Wallet and may be rounded off.

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The author is an amateur boxer, a blockchain architect, a Tintinologist and a retired hacker.