CRYPTOCURRENCY – A NEW INVESTMENT AVENUE IN INDIA?
Only if you are living in the 90s era, you must not be aware of the words bitcoin or cryptocurrency. In today’s times, cryptocurrency is becoming very famous among investors all over the world. But the position of cryptocurrency in India is still in question. This article will surely make things much simpler for you. Happy reading!!
As we come to think about it, the very first question that strikes our minds is ‘What is cryptocurrency?’. But before we know cryptocurrency, we should know the blockchain technology which is the foundation of cryptocurrency.
Blockchain is mainly based on computer networks through which the transactions are duplicated and distributed. It becomes nearly impossible to cheat, change or hack the system because of the way information is recorded in the Blockchain. Essentially, it is considered a digital ledger for such transactions. This concept was first introduced in a paper in 1982, but it was only in a 2008 paper by the pseudonymous Satoshi Nakamoto titled “Bitcoin – A peer-to-peer electronic cash system” which brought this concept into actual use.
Cryptocurrency is a digital currency available only in cyberspace that can be used for carrying out online transactions. These are very secure transactions as they use blockchain technology. Companies issue their cryptocurrencies are known as tokens which can be used to purchase their products. One needs to buy cryptocurrency with real currency.
CRYPTOCURRENCY AND INDIA
While the entire world is into cryptocurrency these days, India is also one of them. Especially the craze for cryptocurrency among the youths of India is notable. However, the legality of cryptocurrency in India is still in question. Even though the government has not banned cryptocurrency yet, it has also not given its acceptance to it. In March 2018, the Reserve Bank of India(RBI) had issued a circular by which it had forbidden all financial institutions to provide any financial transactions based on virtual currency in India. The IAMA i.e. Internet and Mobile Institution of India had challenged this circular along with the other petitioners. The IAMA stated that the trading of cryptocurrencies is not illegal but a legitimate business activity. Also, it argued that virtual currency can be treated as an asset or a commodity only and cannot be considered as a currency. Thus, it does not fall under the jurisdiction of RBI to force regulations over it. As of 2021, the government is in a process of creating a digital currency issued by the Reserve Bank of India and banning all private cryptocurrencies.
Yet none of these has stopped Indians from investing in cryptocurrencies and India now has around 10 crore crypto owners according to a study. The prices of various cryptocurrencies like Bitcoin, Dogecoin, Ethereum, etc. are soaring higher with each passing moment. According to a report, India’s crypto market has seen an astonishing rise of 641% in just the past year. Till May 2021, according to a report, Indians have invested $6.6 billion in cryptocurrencies. What attracts people more towards cryptocurrencies is that they are cost-effective and time-effective as well. As cryptocurrencies are entirely based on the internet the process of transaction takes place in just some seconds and the cost of the transaction is also very less due to the absence of third-party intermediaries. With the increasing investment in cryptocurrencies, various crypto exchanges are doing well in India creating job opportunities for the people. As of now, around 350 crypto start-ups are flourishing in our country. Various crypto companies like CoinSwitch Kuber, WazirX, Vauld, etc. are yielding abundant employment daily. There are more than 10,000 jobs in the crypto industry with crores of people investing in them daily. This has also impacted our economy positively making the advantages of cryptocurrency more visible to the people.
All in all, the issues and advantages of cryptocurrency go hand in hand. One must be extremely cautious while investing in cryptocurrencies because it still does not have any regulations over them. Also, we should keep in our minds that these cryptocurrencies may be prohibited from our country. Thus with growing investments, we can say that cryptocurrency is a new investment avenue in India but it comes with its own volatility and uncertainty.