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11th September Current Affairs

Cryptocurrency and related issues

(GS-III: Awareness in the fields of IT, Space, Computers, robotics, nano-technology, bio-technology and issues relating to intellectual property rights)

In News:

RBI Governor Shaktikanta Das recently said the central bank continues to have “serious and major” concerns about cryptocurrencies like Bitcoin and has conveyed them to the government.

Background:

Private cryptocurrencies like Bitcoin, which are unregulated, mined through a complex process and have highly volatile prices, are under the regulatory gaze in India despite their proliferation as an asset class.

Present status of Cryptocurrencies in India:

An inter-ministerial panel on cryptocurrency has recommended that all private cryptocurrencies, except any virtual currencies issued by state, will be prohibited in India.

The Reserve Bank of India (RBI) has also raised concerns on the cryptocurrencies traded in the market and conveyed them to the Centre.

Back in March 2020, the Supreme Court had allowed banks and financial institutions to reinstate services related to cryptocurrencies by setting aside the RBI’s 2018 circular that had prohibited them (Based on the ground of “proportionality”).

What are Cryptocurrencies?

Cryptocurrencies are digital currencies in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

Examples: Bitcoin, Ethereum etc.

Why is the RBI against the use of cryptocurrencies?

Sovereign guarantee: Cryptocurrencies pose risks to consumers.  They do not have any sovereign guarantee and hence are not legal tender.

Market volatility: Their speculative nature also makes them highly volatile.  For instance, the value of Bitcoin fell from USD 20,000 in December 2017 to USD 3,800 in November 2018.

Risk in security: A user loses access to their cryptocurrency if they lose their private key (unlike traditional digital banking accounts, this password cannot be reset).

Malware threats: In some cases, these private keys are stored by technical service providers (cryptocurrency exchanges or wallets), which are prone to malware or hacking.

Money laundering.

SC Garg Committee recommendations (2019):

Ban anybody who mines, hold, transact or deal with cryptocurrencies in any form.

It recommend a jail term of one to 10 years for exchange or trading in digital currency.

It proposed a monetary penalty of up to three times the loss caused to the exchequer or gains made by the cryptocurrency user whichever is higher.

However, the panel said that the government should keep an open mind on the potential issuance of cryptocurrencies by the Reserve Bank of India.

UDAN scheme

(GS-III: Awareness in space)

In News:

The Civil Aviation Ministry has announced its agenda over the next 100 days. It includes:

  • Launching 50 new routes under the UDAN scheme.
  • Rationalising the value added tax (VAT) charged on aviation turbine fuel (ATF).

About UDAN scheme (Ude Desh Ka Aam Nagrik) Scheme:

The scheme is aimed at enhancing connectivity to remote and regional areas of the country and making air travel affordable.

It is a key component of Centre’s National Civil Aviation Policy led by Prime Minister Narendra Modi and launched in June 2016.

Under the scheme, nearly half of the seats in Udan flights are offered at subsidised fares, and the participating carriers are provided a certain amount of viability gap funding (VGF) – an amount shared between the Centre and the concerned states.

The scheme will be jointly funded by the central government and state governments.

The scheme will run for 10 years and can be extended thereafter.

UDAN 4.0:

The 4th round of UDAN was launched in December 2019 with a special focus on North-Eastern Regions, Hilly States, and Islands.

The airports that had already been developed by Airports Authority of India (AAI) are given higher priority for the award of VGF (Viability Gap Funding) under the Scheme.

Under UDAN 4, the operation of helicopters and seaplanes is also been incorporated.

Findings of Chandrayaan-2

(GS-III: Awareness in space)

In News:

The Orbiter and other instruments of Chandrayaan-2 mission have, in two years, gathered a wealth of new information that has added to our knowledge about the Moon and its environment.

What happened to Chandrayaan-2?

Chandrayaan-2, India’s second mission to the Moon, had failed to make a soft-landing on the lunar surface.

The lander and rover malfunctioned in the final moments and crash-landed, getting destroyed in the process.

But, why is this mission still relevant?

Despite the failure, the mission’s orbiter and other parts have been functioning normally, gathering information. Recently, the Indian Space Research Organisation (ISRO) released the information gathered by the scientific payloads till now, some of which were still to be analysed and assessed.

What is the information gathered?

Presence of water molecules on moon: The mission has given the most precise information about the presence of H2O molecules on the Moon till date.

Presence of Minor elements: Chromium, manganese and Sodium have been detected for the first time through remote sensing. The finding can lay the path for understanding magmatic evolution on the Moon and deeper insights into the nebular conditions as well as planetary differentiation.

Information about solar flares: A large number of microflares outside the active region have been observed for the first time, and according to ISRO, this “has great implications on the understanding of the mechanism behind heating of the solar corona”, which has been an open problem for many decades.

Exploration of the permanently shadowed regions as well as craters and boulders underneath the regolith, the loose deposit comprising the top surface extending up to 3-4m in depth. This is expected to help scientists to zero in on future landing and drilling sites, including for human missions.

Chandrayaan-2 Mission:

The Chandrayaan-2 mission, which was lost after it hard landed on the dark side of the Moon in 2019, remains active in the form of its orbiter hovering over the Moon.

Scientists used the Solar X-ray Monitor (XSM) onboard Chandrayaan-2 in September 2019 to study the Sun.

The primary objective of Chandrayaan 2 was to demonstrate the ability to soft-land on the lunar surface and operate a robotic rover on the surface.

The mission consisted of an Orbiter of the Moon, Vikram (after Vikram Sarabhai) – the lander and Pragyan (wisdom) – the rover, all equipped with scientific instruments to study the moon.

Impact of fossil fuel extraction on global warming

(GS-III: Conservation related issues)

In News:

According to a new study (published in the journal Nature), global fossil fuel extraction needs to go down to keep global warming to below 1.5 degrees Celsius, which is the target set by the 2015 Paris Climate Agreement.

Key findings:

The global oil and gas production should decline by three per cent per year until 2050 to reach the target set by the 2015 Paris Climate Agreement.

As of now, both planned and operational fossil fuel extraction projects are not conducive to meeting the targets set.

A substantial number of regions in the world have already reached their peak fossil fuel production and that any increase in fossil fuel production will have to be offset by a decline elsewhere, if the goal wants to be achieved.

The required unextracted reserves need to be 58 percent for oil, 59 percent for fossil methane gas and 89 percent for coal by 2050. Which is to say that these percentages of fossil fuels need to remain unextractable if global warming targets are kept in mind.

Why is there a need to limit the use of fossil fuels?

Global cost of air pollution from fossil fuels is high: It was around $2.9 trillion per year, or $8 billion per day, which was 3.3 per cent of the world’s GDP at the time.

India is estimated to bear a cost of $150 billion from air pollution caused by fossil fuels.

Challenges ahead:

As of now, human activities have already caused global temperatures to rise by about 1 degree Celsius above pre-industrial levels (1950-1900).

Currently, countries’ emissions targets are not in line with limiting global warming to under 1.5 degrees.

What is the goal set out by the Paris Climate Agreement?

The Paris Climate Agreement that was signed by 195 countries in 2015 has set out a goal to limit climate change in the coming decades.

The agreement aims to slow the process of global warming by making efforts to “hold the increase in the global average temperature to well below 2 degrees above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees above pre-industrial levels”.

Need of the hour for India:

  • Reduce emphasis on domestic exploration.
  • Increase productivity of producing fields.
  • Increase strategic reserves.
  • Restructure and reorganize public sector petroleum companies.
  • Avoid siloed thinking.