Context: In this episode of the Perspective Prog. based on The Cryptocurrency Debate. According to the Global Financial Stability Report published this month by the International Monetary Fund, the popularity of crypto assets is growing. 

• The market value of crypto assets surpassed $2.5 trillion in early May before falling 40% and then recovering to $2.1 trillion by September 2021. 
• This report also brings to light the risks associated with the spread of crypto assets. These include fiscal risks to governments and systemic risks to the financial system suggesting that an increased usage can reduce the ability of central banks to implement monetary policy effectively. 
• India is not a stranger to Cryptocurrencies. As per comparison platform Broker Chooser's recent report at 10.07 crore India has the highest number of cryptocurrency holders in the world. 
• 2021 Global Crypto Adoption Index released by Chainalysis has placed India second out of 154 nations. 
• However Cryptocurrencies are not accepted as legal tender in India. In fact in the Budget Speech for 2018-19 the Government had said that it does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system. 
• The Government had also said it will explore use of block chain technology proactively for ushering in digital economy. 
• A legislation on this issue is also being worked out by the govt. RBI on its part has also cautioned users, holders and traders in virtual currencies regarding various risks associated in dealing with such VCs through its public notices over the past few years. 
• The Central Bank has also said that it is working on a phased strategy for the launch of its digital currency by this year end.