What is cryptocurrency?
A cryptocurrency is a form of payment that can circulate without the need for a central monetary authority such as a government or bank. A cryptocurrency is a medium of exchange that is digital, encrypted and decentralized. Cryptocurrencies typically use decentralized control as opposed to centralized digital currency and central banking systems.
Cryptocurrencies in India:
In 2018, The RBI issued a circular preventing all banks from dealing in cryptocurrencies. This circular was declared unconstitutional by the Supreme Court in May 2020.
Recently, the government has announced to introduce a bill; Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, to create a sovereign digital currency and simultaneously ban all private cryptocurrencies.
In Budget 2022, finance minister Nirmala Sitharaman said the transfer of virtual digital assets would attract a 30 percent tax. The government has not made crypto legal under the Finance Bill, but it made the gains from it as taxable.
The government also plans to issue a digital currency following the recommendations of the Reserve Bank of India (RBI).
Types of Cryptocurrency:
Bitcoin is the first and the most popular and valuable cryptocurrency. It was created by Satoshi Nakamoto, a pseudonymous person or team who outlined the technology in a 2008 white paper.
The competing cryptocurrencies that were created as a result of Bitcoin’s success are known as altcoins. Some of the well known altcoins are as follows:
Bitcoin currently represents more than 60% of the total value of cryptocurrency.
Advantages of Cryptocurrency:
Cryptocurrency has the following advantages:-
- Cryptocurrencies make it easier to transfer funds directly between two parties, without the need for a trusted third party like a bank or a credit card company
- It is a cheaper alternative compared to other online transactions
- Payments are safe and secured and offer an unprecedented level of anonymity
Disadvantages of Cryptocurrency:
Cryptocurrencies have the following disadvantages:-
- Cryptocurrencies pose risks to consumers
- Payments are not irreversible
- Cryptocurrencies are more vulnerable to criminal activity and money laundering
- A central bank cannot regulate the supply of cryptocurrencies in the economy
How Do You Get Cryptocurrency?
Any investor can purchase cryptocurrency from popular crypto exchanges such as Coinbase, apps such as Cash App, or through brokers. Another popular way to invest in cryptocurrencies is through financial derivatives, such as CME’s Bitcoin futures, or through other instruments, such as Bitcoin trusts and Bitcoin ETFs.
For more details contact out team at +91-7991109093 or drop email us at [email protected]
Note: This Post was last updated on January 21, 2023
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation i.e. January 21, 2023. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, We assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. We assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL WE SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.