And for a Friday with RBI reiterating it’s warning against Cryptocurrency, some thoughts….. some musings…..
First and foremost, what is Cryptocurrency? Whatever it is, it is not at all currency or legal tender. It is not backed or guaranteed by any sovereign authority. The Indian rupee or US dollar is a “fiat currency”. It is backed by the Central Bank of the country, which guarantees its value. Actually it should have been called Cryptoasset, cos that’s what it is – just another Asset class since it is based on Blockchain technology whose origins and all others antecedents are completely shrouded. Crypto is gaining popularity across the world as a speculative investment class. Its Anonymity, lack of any controls or regulations seems to be the USP. In India, many trading platforms like Coin DCX, Wazir-X, Coin-Switch Kuber, Unocoin, Botbms etc. etc. all trade in Bitcoins. Are they legal? No. Then are they illegal? No. And that’s the confusion that prevails. Millions of investors in India are already hooked to it and are making good profits !!!! Without endorsing the legality, the Union Budget has announced long term Capital Gains tax will be applicable on gains of Crypto trade as with all other investments classes.
My opinion. Anyone above 65 safer to avoid this and those below 45, try only with your investable surplus, that too max limit of 5% as a separate exciting new Asset class. Invest you must. Blockchain technology is the future. RBI will also use Blockchain technology and introduce Digital Currency – CBDC. In India, already people are now familiar with digital currency in its various forms like credit cards, net banking or payment apps like Paytm and Google pay. However, CBDC will be the electronic version of the physical currency exactly same value as the physical, but will revolutionise the entire Banking system and will bring about a quantum change in fintech operations. China has been developing digital currency e-yuan since 2014.
Exciting times with India’s Digitalisation advancements. Let us all support the new strides in the economy, the digital way, the technological way, the SEEGOS way.