A virtual currency called cryptocurrency exists only in the digital world. It cannot be touched like a physical currency note. It can be used for trading and buy goods and services. Currently, cryptocurrency has become an exhilarating market for venture capitalists. But it can be a perilous deal as it involves the concept of the real-world stock exchange. People buy cryptocurrency with a desire to sell it at an increased value. With this aspect, it can give a lot of money to some people but can be proven a deal of loss too.

Cryptocurrency makes use of cryptographic services to manage monetary proceedings. It leverages blockchain technology to acquire separation, lucidity, and stability. The prominent characteristic of a cryptocurrency is that it is not managed by the government which makes it unsusceptible to the old ways of trading.

As cryptocurrency exists with different names so one needs a cryptocurrency exchange for trading. Suppose you have Bitcoin and want to sell it in exchange for Stellar. An exchange will help the person to find someone who wants to sell Stellar. Also, there is a fixed fee of an exchange which is a minimum of 0.1 % for each exchange.

Some people trade in cryptocurrency as a pastime. On the other side some trades as a full-time job. This gives them experience. They use distinct devices that assist them to choose the right currency at bang on time, like any software or application that aids them to scrutinize foregoing movements.

In 2021 Indian capitalists are moving towards cryptocurrency investment unprecedentedly. This can be proven threatening too. It is for the first time that India ranked 11 out of 154 nations in cryptocurrency investment whereas only 3.7 % population invest in the share market. Some people suspect that this magnification is one-dimensional only. This development specifies that Indian cryptocurrency exchange can commemorate and fascinate capital through worldwide bankers.

As this reverberation is occurring without any firm policy from the central bank or the government, this is a troublesome situation in the view of past relationships of the Indian government with cryptocurrency. There are numerous risks with the investment in virtual currency:

  • Cryptocurrency exchanges are prone to get fumbled and prey to some other criminal activity. This security infringement results in deprivation for capitalists.
  • As it is hypothetical trading so it is risky.
  • Capricious
  • Uncontrolled
  • Pricing variations
  • Trading charges may be higher.

India’s central bank constricted banks from dealings in cryptocurrency in April 2018. But in March 2020 Supreme Court dismissed the decision which results in increased demand for crypto. Now cryptocurrency exchanges and capitalists need to recognize the latest circular of RBI as an affirmation. This approval may prevent a blanket ban but there are still no official regulations for this.

Some other issues also uplifted, those related to taxation, payment solutions, and legal status which are still not sorted due to lack of view in this sector by government and RBI. The worldwide cryptocurrency trend is developing swiftly. Many investors, capitalists, and businesses are providing job opportunities. Avinash Shekhar, co CEO of Zebpay proposed that regulatory clarity around crypto can definitely help grow the crypto ecosystem in India. He also suggested that with the official guidelines, cryptocurrency will be able to become a part of the economy as an asset class besides monarch currency.

Indian government scrutinized cryptocurrency and regulation of official digital currency bill in 2021, which may forbid all private virtual currencies in India. Despite this, the keenness of capitalists disallowed to abate. Finance minister Nirmala Sitharaman declared in an interview to The Hindu Business Line newspaper that the government has composed a bill of exchange on cryptocurrency and taken stockholders’ inputs. Also, the cabinet note is ready and we have to see when the cabinet can take it up and consider it.

It is to be considered that acceptance of cryptocurrency in India gets retarded due to RBI ignorance and focus on its own central bank digital currency like the Chinese digital Yuan.

Someone said truly- The fact that it is the technology and it is new has kept them skeptical about crypto markets. This is a new thing that suddenly came out regarding finances which is fundamental in the tech world also. As all investors have knowledge about financial provinces but not technology. So it is now going to be a stretching task for them to synchronize the market.