Day 37 – Q 1. What are the key challenges in regulating emerging technologies like cryptocurrencies, AI and drones? Analyse. (10 Marks)

  • IASbaba
  • March 8, 2022
  • 0
Governance, GS 2, TLP-UPSC Mains Answer Writing
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1. What are the key challenges in regulating emerging technologies like cryptocurrencies, AI and drones? Analyse. (10 Marks)

क्रिप्टोकरेंसी, एआई और ड्रोन जैसी उभरती प्रौद्योगिकियों को विनियमित करने में प्रमुख चुनौतियां क्या हैं? विश्लेषण करें।


Candidates need to write about the emerging technologies in the introduction and then simply analyse the key challenges in regulating the emerging technologies like Cryptocurrencies, AI, and Drones. 


Emerging technologies are technologies whose development, practical applications, or both are still largely unrealized, such that they are figuratively emerging into prominence from a background of nonexistence or obscurity.


Challenges in regulating emerging technologies like Cryptocurrencies, AI, and drones:


  • The almost hidden nature of cryptocurrency transactions makes them easy to be the focus of illegal activities such as money laundering, tax-evasion and possibly even terror-financing. 
  • There is concern that cryptocurrencies like Bitcoin are not rooted in any material goods. Some research, however, has identified that the cost of producing a Bitcoin, which requires an increasingly large amount of energy, is directly related to its market price.
  • If a large number of investors invest in digital coins rather than rupee-based savings like provident funds, the demand of the latter will fall.
  • No Dispute Settlement Mechanisms and control of Securities and Exchange Board of India (SEBI). 


  • Massive Data Centres Needed – Achieving the abovementioned objectives, AI requires massive computational capacity, which means more power-hungry data centres and a big carbon footprint.
  • Jurisdictional Issues of Data Pooling – Countries are passing stricter legislations on data security (Eg: EUGDPR) that require citizen data to be stored on servers located domestically, picking colder climates beyond their borders is becoming a difficult option.
  • Without clear policies on reskilling workers, the promise of new opportunities will in fact create serious new inequalities.
  • Privacy Issues – AI uses digital footprints and feeds them in their algorithm to exploit commercially without our consent.


  • Clear Modus Operandi: Responsibility and division of work should be clear as to Who (the armed forces or the civilian forces) would be responsible for such mechanisms. It is a sub-tactical threat but requires a strategic response. 
  • Difficult to Differentiate: Counter strategy should be so strong that it is able to differentiate between a bird and an actual drone. Also, it should give enough warning to positively identify that it is not a bird, to fire. 
  • Anonymous: Their anonymous nature is a big risk to know about the origin of the drone. Drone attacks can be launched from within as well.


We are seeing some tremendous opportunities with emerging technologies. Those opportunities also have challenges associated with them.  One common thread with all emerging technologies are solutions to multifaceted problems. We will need to develop skill and human resources today to meet all these challenges in the future to aim for social and public good.

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