Cryptocurrencies have become very much popular in India and there are many talks that these digital coins will soon be banned by the Government of India. A Crypto Bill is expected to be announced anytime from the government and there are talks that there will be a twin tax introduced by the government. Let’s look at whether the cryptocurrencies will be taxed by the Govt. of India or not.
There are reports that India is planning to impose a tax to boost the short-term investors in the space of cryptocurrency before bringing a ban on these asset classes.
According to reports from business standards one of the largest English-language newspaper in India, the government is planning to impose personal Income Tax (IT) and a Goods and Service Tax (GST) on the gains received by the traders and investors who are involved in the trading of cryptocurrencies and also from the gains received as platform fees.
GST on Bitcoin
A senior finance ministry official who is familiar with the subject matter conveyed that bitcoin will be categorized under the financial services which will attract a commission fee of 18% GST by exchanges under this segment.
The investors will also have to pay Income Tax on the earning earned from the cryptocurrencies. The senior official has informed an official circular which will be released soon. According to the sources from the newspaper, the authorities are aiming towards charging taxes for both the fiscal years that are April 2020 to March 2021.
The government is also planning to introduce a cryptocurrency bill in the parliament for the ongoing session. The bill will focus on seeking a ban on the private currencies and a formal start for the development of a central digital currency which will be issued by the central bank of the country.
The actual contents of the bill are not yet known and the Government hasn’t mentioned the term private currencies. The bill is expected to fill the gaps regarding the policies according to Anurag Thakur who is the minister of state for finance.
The Government has not mentioned how the gains from cryptocurrencies are supposed to be taxed but the CEO of WazirX Nischal Shetty said that the earnings of cryptocurrencies are supposed to be taxed like any other source of income and should come under the Income Tax slab.
He added that his cryptocurrency platform has been voluntarily paying the GST on the collection of the trading fees. According to another source which says taxation cannot be confirmed that the digital coins would be made legal in the country. He added that taxability and the legality of the coins are independent of each other and not dependent.
An anonymous official had said that while cryptocurrencies are unregulated, they have not yet been banned and the rules for taxation apply for all the services and commodities.
FAQ
Is Cryptocurrency legal in India?
Cryptocurrencies are not illegal in India anybody can buy, sell and trade cryptocurrencies.
Will India ban Cryptocurrency again?
According to the rumoured Cryptocurrency and Regulation of Official Digital Currency Bill, the Indian government might ban private cryptocurrencies in India.
Will Cryptocurrency be taxed in India?
According to the reports Cryptocurrency might be be taxed in India soon.
Conclusion
If the news about the ban of cryptocurrency and the bill regarding the cryptocurrency gets confirmed it will be a clarification on how the cryptocurrency industry will work and how the cryptocurrency users will be taxed.
The popularity of cryptocurrencies has been increasing over the years. We would have seen huge returns provided by these cryptocurrencies, with the promotion of these coins by Elon Musk and his company. Let’s look at the top cryptocurrencies in the market which you can choose to invest in in the year 2021.
Bitcoin is considered to be the king of cryptocurrencies moreover the term cryptocurrency was bought into the limelight because of bitcoins. They have the highest liquidity value compared to any other cryptocurrency in the market.
Bitcoin is a decentralized digital coin with no restrictions. It is widely accepted across the globe and the increase in popularity of bitcoins has led companies such as Tesla to accept it as a payment gateway.
The market capitalization of bitcoin is USD 1,067,761,831,980 and the current price of one bitcoin is around USD 57,048.95.
Ethereum
Ethereum is a popular cryptocurrency after bitcoin. Ethereum is the second largest cryptocurrency in the market. Ethereum will let users to create smart contracts as it is a decentralized open-source blockchain. Ethereum is the second largest in market capitalization after bitcoin.
The market capitalization of Ethereum is USD 482,724,167,431 and the current price of one Ethereum is around USD 4,156.17.
Binance Coin
Binance Coin would be the best option if you are looking to diversify your cryptocurrency investment. Binance which is the parent company of this cryptocurrency has a strong business history and has created utility tokens. Traders also can use Binance coins for purchasing other cryptocurrencies in the market through Binance Exchange.
Binance Exchange is one of the fastest growing crypto exchanges in the crypto market.
The market capitalization of the Binance coin is USD 103,328,372,259 and the current price of one Binance Coin is around USD 673.67.
Doge Coin
DogeCoin which was initially started as a meme has now has a huge market capitalization in the cryptocurrency market. It has provided huge returns to its investors in the recent times. The cryptocurrency’s price was hyped and increased by the Reddit users in the early 2021 and later it was further supported by Elon Musk. Recently Elon Musk’s company SpaceX had announced that it would take payments in the form of Doge Coins. In a recent tweet Elon musk tweeted that if users wanted Tesla to accept Dogecoin.
Tether is a different type of cryptocurrency; it is called a stable coin. This cryptocurrency’s value is derived from the fiat currencies such as USD, Euros, etc. Investors who require more stability and less amount of volatility in their investment would choose to invest into the stable coins.
The market capitalization of Tether is USD 57,292,456,987 and the price of one Tether is around USD 1.00.
Cardano
Cardano is another popular cryptocurrency and is becoming a favourite one among the investors. This coin uses a different blockchain called as Ouroboros blockchain, which means that it has two blockchains instead of a single one. Most of the investors of Cardano are Japanese and it is popularly called as the Japanese Ethereum.
The market capitalization of Cardano is USD 57,111,319,394 and its current price is around USD 1.78.
Litecoin
Litecoin is another top cryptocurrency and has a high liquidity value. Litecoin is similar to bitcoins in regards to supplying as there are only 84 million coins with a block reward. The average time for the miners to mine a Litecoin is around two minutes making it easier to mine. The increase in the popularity of these coins makes it the best of the altcoins.
The market capitalization of Litecoin is USD 25,705,190,474 and its current price is around USD 384.43.
How common are Cryptocurrencies around the world
Bitcoin Cash
Bitcoin Cash became popular due to the stability concerns faced by bitcoin. The name bitcoin attached to this cryptocurrency has led the cryptocurrency to scale in the recent years and providing a huge market capitalization by catching the eyes of the investors.
The market capitalization of Bitcoin cash is USD 29,505,644,297 and its current price is around USD 1,564.62.
XRP is another popular and one of the to cryptocurrencies in the market. This coin is pre-mined and the mining procedure of XRP is less complicated compared to bitcoins. It is a native cryptocurrency for the products developed by Ripple Labs.
The market capitalization of XRP is USD 53,135,015,798 and its current price is around USD 1.51.
Shiba Inu Coin
Shiba Inu Coin is one of the recent cryptocurrencies which has been surging in the top 100 of the cryptocurrency market. Ever since the recent dip in bitcoins, there has been a lot of attention given to this cryptocurrency as the investors are on the lookout for something big.
Shiba Inu Coin has a market capitalization of USD 12,309,275,819 and its current price is around USD 0.00003114.
FAQ
What is the cheapest Cryptocurrency?
Dogecoin is the cheapest cryptocurrency to purchase in 2021.
Who owns the most bitcoin?
Satoshi Nakamoto, the cryptocurrency’s pseudonymous investor owns the most bitcoin.
What did Warren Buffett say about Bitcoin?
Warren Buffet said that, ‘Cryptocurrencies basically have no value and they don’t produce anything,” Buffett also told CNBC last year that “I don’t have any cryptocurrency and I never will,”.
Conclusion
Most of the individuals believe that cryptocurrencies will have a huge market in the coming future and it would replace all the fiat currencies and the other half believe that the value of cryptocurrencies would just reduce over the time and consider it to be another bubble. However many investors have generated huge returns from investing in these asset classes.
Stablecoins are gaining popularity in the recent years. As of May 2020 Stablecoins, were worth USD 10 billion. In certain countries like Brazil, people are preferring stable coins to their national currencies. That is during uncertain economic conditions. Let’s look at the below article for the meaning of stable coins and is stable coins better than bitcoins.
Stablecoins are a new group of cryptocurrencies. The name itself gives the meaning which says stable. Stablecoins are cryptocurrencies that attempt to offer stability in the price movement. They are backed by a reserve asset.
It is a cryptocurrency that is tied to an outside asset such as U.S Dollar, Gold, or any other asset to stabilize the price. Stablecoins have gained fiction as they attempt to offer the best of both the worlds such as the privacy of payments of cryptocurrencies and the instant processing plus the volatility-free stable valuations of fiat currencies.
The popularity of stable coins has risen so far that the headlines of the crypto market in recent months have Stablecoins in it. They are primarily developed to minimize the volatility of the price.
List of Stablecoins
Fiat-collateralized Stablecoins
This type of Stablecoins is the ones which have its underlying value derived from a fiat currency or in simple words the Stablecoins are pegged towards certain country’s currency such as U.S Dollar, Euro, Yen, etc.
One of the well-known fiat collateralized stable currency is Tether which is shortly known as USDT. This Stablecoin is pegged to the value of the U.S dollar in the ratio 1:1. This means that 1 Tether is equal to the value of 1 U.S Dollar.
Another example of a well-known Stablecoin is Gemini which is shortly known as GUSD. This Stablecoin is pegged to the value of the U.S dollar in the ratio 1:1. This means that 1 Gemini is equal to the value of 1 U.S Dollar.
Non-collateralized Stablecoins are not backed by any asset classes. These Stablecoins run on certain algorithms which will manage the supply and demand of these coins and keeps the prices stable. Some examples for Non-Collateralized Stablecoins are CarbonUSD which is also known as Carbon and kUSD which is also known as Kowala.
Types of Stablecoins
Commodity-Collateralized Stablecoins
Some Stablecoins are backed to certain precious metals such as gold, metals, or commodities such as oil. These Stablecoins are known as commodity-collateralized Stablecoins.
One of the well-known commodity-collateralized Stablecoin is Digix that has its short form as DGX which is backed by the commodity Gold. This means that 1 DGX is equal to 1 gram of Gold on the ETH network.
One of the other examples of commodity-collateralized Stablecoins is Tiberius Coin which has its short form as TCX. The Stablecoins are backed by the combination of 7 different metals which is commonly used in the development of hardware technologies. The idea behind pegging it towards the 7 metals is as these metals are extensively used to make technology will indirectly increase the value of TCX.
Crypto-Collateralized Stablecoins
These are stable coins which are pegged against different cryptocurrencies. Crypto-collateralized Stablecoins will always be in the 1:1 ratio through over-collateralization.
BitUSD is a well-known Stablecoin which is crypto-collateralized token, that is collateralized towards a cryptocurrency named Bitshares.
Stablecoins can be used as fiat currency that can be used as a mainstream payment. It has an additional benefit of being a virtual coin. It is legally backed and secured as well. These are also very useful for overseas payment as no conversions of fiat currencies and can be used irrespective of the country or place.
In streamlining P2P payments
You can use Stablecoins as an ideal payment option for loan payments, rent payments, subscriptions and more as it is irreversible, traceable and transparent.
Protection from local currency crashes
On an average the prices of goods keep doubling every few weeks. Stablecoins are used as a replacement to maintain fiat currencies from crashing in value.
Stablecoins will offer notable solution to all these problems by allowing them to quickly exchange their fiat currency into a stable currency. Thus, it prevents them from further price drops.
Why is it better than bitcoin?
Stablecoins provide stability and it is one of the major reasons why it is better than bitcoins as the world looks at stability. Stablecoins also ensure faster transfer of money across different locations. Stablecoins can also replace fiat currencies in certain countries where their currencies are unstable.
Tether (USDT) is a Stablecoin, So named because it “tethers” itself to the value of the USD, Tether is the most well-known Stablecoin in the crypto world. It’s backed by gold, traditional currency and cash equivalents.
What is Stablecoin used for?
Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference. Stablecoins may be pegged to a currency like the U.S. dollar or to a commodity’s price such as gold.
Can Stablecoins increase in value?
Fiat-backed stablecoins are considered to be the most stable of stablecoins, but this stability doesn’t make them a very profitable long-term investment and their value is unlikely to increase significantly over time.
Conclusion
We may see stablecoins demand increasing in the future and will even be able to see much more stablecoins coming up in the future.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by GNEISS.
Global Network Encryption Investment Security Services (GNEISS) is one of the most Trustable Forex Trading Technology Solution Providers. GNEISS is the First Decentralized P2P free marketplace built on top of the Bitcoin and Ethereum Blockchains. It aims to be the most advanced Fintech security service while providing the public alternatives to existing government registration and banking services.
Founded by Michael Morton and Hunter Enoch in 2016, Global Network Encryption Investment Security Services (GNEISS) will provide a trustless Peer to Peer system where everyone has equal access to all free-market and government registry functions – Only requirement is an internet connection.
GNEISS – Company Highlights
Organization Name
Global Network Encryption Investment Security Service Inc (GNEISS)
Accepted in Venture Summit, West 2019 (Only 3 blockchain companies could present)
Clients
1,180+ users and growing
Website
gneiss.io
StartupTalky interviewed Michael Morton (founder & CEO of GNEISS) to know the Journey of GNEISS by shedding some light on GNEISS vision, work culture, growth, business model, Forex trading technology services, USP & more….
1. Tell us about the inception of GNEISS & How has the journey been for the company so far?
GNEISS was founded by Michael Morton and Hunter Enoch in December 2016 after over 1.5+ years of designing and coding. Since it’s initial Alpha launch, GNEISS has already launched it’s Beta and finished the stage 1 of the project by the end of 2020. To get to finish stage 1 with no big investors was no easy chore but with the help of One Brick Tech and several other companies we made the impossible possible.
2. How do you integrate the 2 biggest block chains: Bitcoin and Ethereum? How did it help you to provide best-in-class Forex trading technology services?
GNEISS integrates the two biggest blockchains: Bitcoin and Ethereum. Bitcoin is the crypto-gold standard for trading, while Ethereum powers and logs every crypto-asset and smart contract function on the GNEISS network. Using the biggest and most technologically advanced blockchains gives us a huge edge over other Forex FinTech companies running their own private blockchains or even running everything with no blockchain at all with a centralized server.
GNEISS Logo
3. Shed some light on your Forex trading technology services? What kind of responses have you received from customers over the years
GNEISS started out with giving people the power to easily create their own ERC-20 token for trading but that was just the Alpha. Since then we have incorporated the most advanced smart contracts in the industry designed to work with a ERC-20 token to allow users to mint/burn coins, add transaction taxes, add interest rates, and even securitize that ERC-20 token asset with other crypto.
Using the secure feature where a user could store BTC, ETH, or any other ERC-20 token gives users the ease of mind knowing that the value is there regardless and if the collateral’s value ever drops below the agreed contract support level then the collateral is instantly liquidated and sent proportionally to those who owned the now liquidated coin. Having secured contracts also makes GNEISS the first “Trustless Economy” which economists have been trying to accomplish for decades by decentralizing banking power to the people rather than just a few thousand banks.
Customers who have tried our platform all say that it’s pretty cool. Some wonder how they will use the new found technology but everybody who has seen it or tried it thinks it could be the next big thing. So far we have 265+ accounts which is growing each day. We hope and aim to be the leader in this blockchain FinTech industry by creating a whole new type of economy which will open the door to never before seen business models
4. What is the work culture at Global Network Encryption Investment Security Services? How do you create a sense of belongingness?
The work culture from day one has been the typical future billion dollar startup founded out of a home garage only we didn’t have a garage. Most meetings are over the phone or through certain text platforms like Slack or Discord.
The times which we have face to face meetings are usually at some restaurant or bar. By not having an office we save a bunch of money that we can reinvest elsewhere to build up the product. Once we are trading over a $1 million dollars a week we’ll look at getting a decent sized office in the British Virgin Islands and Charlotte, North Carolina. Everybody in the company has a great sense of belonging since they know their helping change the world for the better. While supporting American values of freedom, free markets, and fair business.
The mission of GNEISS is to decentralize banking completely by letting everyone have their own banking ledger and using GNEISS as their preferred decentralized P2P free market platform.
6. What differentiates GNEISS from other Forex Trading Technology Solution providers in the industry?
By installing and running a GNEISS node any user can run the app outside of their web browser securely through blockchain tech and have it act as a 21st century military encrypted Bloomberg terminal. Thus making GNEISS easily the most secure platform on the market right now since most don’t even use blockchain tech.
GNEISS is decentralized by 300 Spartan nodes that run the platform along with all the other nodes that double check and verify the GNEISS blockchain. Spartan nodes are chosen from those running basic nodes by having a high enough credit score, Tier 2 verification, and random chance in GNEISS’s Proof of Trust blockchain model. To upgrade the system ⅔’s of the Spartan Nodes need to vote in favor.
8. What does the future hold for GNEISS? What are the Milestones that you seek to achieve in the years to come?
The future of GNEISS after we finish stage 1 completely, will be to then add a networking tab inside the GNEISS app that will look similar to Slack and Discord but be using highly secured and encrypted blockchain to achieve total personal privacy.
By Q2, 2020 GNEISS will incorporate loans and make our credit scoring system public so merchants have another accurate credit report to go by. Lastly by end of 2021 we should have our first gold/silver/crypto ATMs built with a couple distributed in select areas. These plans only run through the end of 2021 too.
Within 10 years, GNEISS aims to become a fully decentralized free market place with all the functions one could find on wall street.
GNEISS is the First Decentralized P2P free marketplace built on top of the Bitcoin and Ethereum Blockchains.
Creation and trading of ERC20 Tokens that are registered on the platform can be traded with Bitcoin (Free Bitcoin transactions due to Lightning Network).
Creation and Registration of ERC20 Tokens on the GNEISS Platform allow users to instantly create markets for their project. The users tokens can be traded with Bitcoin (free transactions through LN) to any other ERC20 token that is registered on the GNEISS platform (900+ trading pairs).
GNEISS gives the user the ability to store and trade BTC, ETH or any other ERC20 token on Ethereum’s Blockchain.
Users can utilize GNEISS Decentralized Registry to register their Birth Certificate, Car, House, etc. on the blockchain. This allows users to access these legally binding files from anywhere in the world rather than depend on a safety deposit box or fire safe (Untrustworthy 3rd Party)Birth, death, marriage certificates, Register car, house, boat, spaceship or “other” registration to register anything you want.
Match your Birth Certificate with Tier 2 GNEISS verification for globally recognized identification.
Free Marketplace – opening up free trade to the world by creating a decentralized free marketplace with the most advanced computer and network security on the market.
NFTs (Non-Fungible Tokens) have gained a lot of popularity in recent years. You would have already been through certain social media posts or gone through some news about NFT’s of certain arts being sold for billions of dollars.
Let’s understand what exactly NFT auction Marketplace are.
NFT (non-fungible token) this term revolves around the word fungibility. Fungibility means any product which cannot be replaced with another identical item.
For example, the chair you use, your mobile phone, your laptop all these items cannot be replaced with other identical items. You may get the same model of your mobile phone, but you wouldn’t be able to buy the same model of your mobile phone which you have used for so many months or years. Other examples would be certain artworks such as the art of Mona Lisa and many other such items.
For getting a clear understanding, let’s look at an example of fungible items. A fungible item can be money. A note of INR 10 can be replaced with any note of INR 10. Even if the serial numbers on the note change with INR 10 we can buy the same number of items. This concludes, Money can be an example of fungible items.
But again, a fungible and non-fungible item changes from person to person according to his perspective. As explained in above example, a chair can be fungible as well as non-fungible.
You can buy the same model of your chair from the store. But your chair can be a non-fungible item only when you have developed an attachment to it, and you feel that there is something special about it.
A coin would just be a coin for you, but it would mean much more for a coin collector. This makes the item fungible for you and non-fungible for the coin collector.
Non-fungible tokens are unique digital items with their ownership managed through blockchain technology. Some of the examples of Non-fungible items would include collectibles, game items, digital art, event tickets, domain names, and even records for the ownership of physical assets.
OpenSea is the largest marketplace for digital goods that are user-owned. It has a broad set of categories of around 200 and more. OpenSea has the most items in the digital goods which is more than 4 million and the has the best prices for new items. It includes collectibles, gaming items, digital assets, and digital arts. You can buy, sell, or trade digital goods with anyone around the world using OpenSea.
OpenSea Website
OpenSea is also a decentralized marketplace which means there is no central authority guiding this platform. Instead, you will be able to store your items in your own wallet of your choice.
KnownOrigin
KnownOrigin was founded by David Moore, Andy Gaye, and James Morgan. This is one of the fastest-growing digital art platforms. KnownOrigin is also a decentralized platform that uses blockchains for recording the transactions.
KnownOrigin has more than 330 artists and more than 12,000 digital artworks have been sold on the platform. It is an artist-driven platform that makes it easier for digital artists to create and sell their arts.
KnownOrigin Website
An artist can create their digital art and upload the file and documentation through KnownOrigin. Later the art will be tokenized by the platform and it will be live on the KnownOrigin’s gallery.
If you are a customer or a collector you can browse through the gallery, find the artwork of your choice, finish the payment, and make the purchase. The Ethereum address will be captured during the purchase.
OpenSea is an NFT Auction Marketplace, which is more like an eBay for digital products. You can find anything related to digital products on OpenSea. It is the largest and the first peer-to-peer NFT platform for crypto goods.
Whereas KnownOrigin is mainly concentrated on the digital artists. Since it is concentrated on artworks. You wouldn’t find anything other than art in KnownOrigin. The items on KnownOrigin would look more like items on sale in an Art Gallery.
If you are an artist or a collector of artworks you should prefer KnownOrigin as you would find a wide range of options and if you want some other crypto goods you can prefer OpenSea as it is the largest NFT marketplace.
FAQ
What is a NFT auction?
NFTs, or non-fungible tokens, are essentially blockchain-based certificates validating that someone owns a piece of digital art.
How can I buy NFT?
Most NFTs are Ethereum-based tokens, many marketplaces for these collectibles accept Eth tokens as payment.
What are DeFi products?
DeFi is short for decentralized finance, an umbrella term for a variety of financial applications in cryptocurrency or blockchain.
Conclusion
There are a lot of NFT platforms other than KnownOrigin and OpenSea. Some of them include Rarible a platform to create NFT, SuperRare, Atomic Assets, Axie Marketplace, Decentralized marketplace, Viv3, TreasureLand, NFT Showroom, and many more.
NFTs will gain a lot more popularity in the coming years. Some big players such as Mark Cuban, Gary Vaynerchuk, and many others have also expressed their interest in NFTs.
Indian Government is planning to introduce a new bill that will ban all the private cryptocurrencies in the country. The government has plans to ban cryptocurrencies such as bitcoin and Ethereum and to introduce a national cryptocurrency. The new bill is planned to be introduced in the lower house of the parliament.
This bill is not considered to be the first time the Indian Government has been against the purchase of digital assets in the country. In the year 2018, the Indian government panel had proposed to ban all the cryptocurrencies in the country and had suggested that the offenders would be put in jail for a period of 10 years.
In the same year, the finance minister Arun Jaitley had said that The Government of India doesn’t consider the cryptocurrencies legal. He said that it is not considered as a digital asset or a payment method and that the Government would take all legal actions to stop the use of these digital coins for payment activities. The government had stated that it was not approved by them and it was illegal.
The monetary regulator of the country had later banned the use of cryptocurrencies in the year 2018. The ban was after the reporting of a number of fraudulent activities related to cryptocurrencies. However, the ban was later removed by the Supreme Court of India in March 2020.
There has been a lot of anxiety and fear across the country regarding the ban of cryptocurrencies. It is said that there are around 75 Lakh Cryptocurrency owners in the country. Their holdings have a worth of up to $1 billion.
One of the other major reasons for the ban of cryptocurrencies in the country is because of the Aadhar card. It is said that the ban of cryptocurrencies would have been already put in action several years ago by the Government without any intention.
The unintentional ban is supposed to be when the government introduced the Jan Dhan-Aadhar-Mobile trinity during the rule of the Modi Government in India. Aadhar was a huge project undertaken by the country which required the citizens of India to register into the financial system of the country by using a unique identification number. The Government wanted to use that network to directly send subsidies.
Brent Johnson who is the Chief executive of the San Francisco Santiago Capital which is U.S based company has said that Aadhar could be the reason for the Government to introduce the new bill in the country. Because the Aadhar card was a project to ensure that all the citizens had an account with the government, their ID’s and payments.
As of March 2020, the unique identification authority has issued over 122 crore Aadhar cards in the country which covers up to 90% of the Indian population. Out of 110 crore bank accounts in the country around 96 crore accounts have been linked to Aadhar cards according to UIDAI.
Brent Johnson also added that, if the mobile network connection is taken into consideration regarding the Aadhar card it would seem like it is safe for the Government of India to create a network to issue of its own cryptocurrency in the country which would be accessible to everyone.
Cryptocurrency and Regulation of Official Digital Currency Bill
The bill that will be introduced is called as “Cryptocurrency and Regulation of Official Digital Currency Bill”. The main intention of the bill would be to create an easy way to provide support to the new digital currency introduced by the Reserve Bank of India.
The bill also concentrates on banning all the private cryptocurrencies in India. The ban will also improve the chances to increase the demand of the National Currency issued by the Government of India.
It is considered that there will be certain exceptions because the Government of India would require the underlying technology of the bill which is the blockchain technology.
Brent Johnson said that the government would most probably want to use the advantage of Aadhar cards to issue its own cryptocurrency and would want to avoid competitions.
e-Kuber
The recent move of the Reserve bank of India which allowed the retail investors of the country to register with e-kuber. It helps the retail investors to open an account with the portal which helps in purchasing government bonds in primary and secondary markets.
This new portal has raised a curiosity amongst the people in the country. The market participants feel that this would be the portal for issuing the National Digital currency in the country.
FAQ
In Which countries Bitcoin is illegal?
Inspite of its rising popularity, cryptocurrencies are illegal in these countries. Saudi Arabia, Algeria, Bolivia Algeria, Ecuador, Bangladesh, Nepal, Macedonia.
Who is the richest Bitcoin owner?
Satoshi Nakamoto, the founder of Bitcoin, rumored to own around 1 million Bitcoins.
How safe is Cryptocurrency?
Cryptocurrency is considered as one of the riskiest digital currency.
Conclusion
The Deputy Governor of RBI, BP Kanungo has told that an internal part of the Reserve Bank of India is working on the model for the cryptocurrency and that RBI would soon give more information regarding it. If they don’t ban cryptocurrency, many investors might get a new revenue stream and most of the youth will invest in it. However, the government has experts who knows better than us. Hence, we must respect whatever decision they take.
The crypto ecosystem has been doing news rounds ever since the RBI proposed a ban on using or trading or holding Crypto currency in 2018. It was all cloudy for the crypto investors until recently when the Supreme court in 2020 quashed the ban on trading on virtual currencies.
RBI has been reluctant to let the crypto currencies co-exist in the Indian economic system. Crypto currency is a booming sector and has put so many miners on the map.
So why is RBI not allowing crypto trade in India? Will it ever oblige? How is crypto business coming along in India? We answer all these questions in this post. Read on to find out more.
In 2018, RBI issued a circular to take down crypto currencies from the Indian virtual trade. The Internet Mobile Association Industry- a non profit organization and a group of corporations dealing in crypto exchange platforms stood up against this circular in the Supreme court.
RBI, in a Financial Stability report, defined virtual currency as unregulated digital money which is controlled and issued by its developers and accepted by a specific community. RBI exercised its power to ban private digital currencies and their trade/circulation through any financial institution in India.
However, in March 2020, this circular was quashed by the Supreme court saying that though RBI has the authority to regulate virtual currencies, it was disproportionate to impose prohibition on trading of crypto and therefore, ultra vires the constitution.
According to the survey of Unique Identification Authority of India (UIDAI), the government has issued over 122 crore Aadhar cards as of March 2020. That means it has covered 90% of the population and out of 110 crore bank accounts in India, 96 crore are linked to Aadhar.
This could be one of the reasons for banning crypto since it is rumored that RBI wants to launch a digital currency of its own and is sparing the competition. The said digital currency is to be called Lakshmi-named after the Goddess of wealth.
RBI has been pretty stringent with its ban on crypto. According to the “Banning of crypto currency and regulation of official digital currency bill 2019” , the draft sentences 10 years of prison to anyone who mines, circulates or holds private digital currencies. This sentence surpasses the 7 years of imprisonment for money laundering.
The Supreme Court’s decree paved way for some relief as it states that virtual currencies are not legal tender but tradable commodities and lacks precise definition and the RBI circular has disproportionately invaded the investors’ rights.
Crypto, especially Bitcoin seems to have come around with the retail investors in India. More than 5 million Indians have invested in Bitcoin.
Crypto is not just being used as exchange in restaurants, shopping, payments and insurance but has now become a prominent source of funding for start ups in India. Start ups are longingly looking at Initial Coin Offering (ICO) as fund raising options. But the situation is contemplating since the ban was announced.
Almost 30 to 40 start up companies from India have tried to pursue the ICOs. The ban has caused these companies to choose foreign jurisdiction and have raised funding from foreign investors.
The ban could bring uncertainty among the retail investors in India.
Nischal Shetty (CEO, WazirX) said – “Criminalizing digital tokens could destabilize existing businesses eroding the wealth of millions”
Crypto startups are developing slowly and steadily because of the regulatory reforms in India. Though India has been gaining exposure on the global front, the traditional methodology of the government seems to hold back a few areas such as the crypto economy. Despite this, there are a few Crypto startups which are propelling and being recognized.
CoinDCX
The Mumbai based startup provides users with various crypto based financial products. Users can buy and sell more than 100 coins instantly with INR.
Nuo
Nuo is a decentralized finance (DeFi) application that converges sellers and borrowers through smart contracts. Nuo network has also launched a new digital banking platform called Juno, which is built on top of Ethereum and depends on Nuo protocol for Nuo banking services.
WazirX
WazirX is the leading crypto exchange platform in India at present. It was the first exchange in India to introduce a native token called the WazirX token (WRX) which has resulted in significant growth of engagement on the platform.
Crypto companies WazirX and CoinDCX along with several others are running a hashtag campaign #IndiaWantsCrypto on twitter to raise awareness about the bill and its consequences. The campaign has already found support from several start-up founders and angel investors such as Sahil Lavingia, Rajiv Mantri and Balaji Srinivasan.
Crypto Ban – Opinions
The sovereign insists on not having private crypto currencies in the Indian ecosystem since it considers crypto as something that is foreign and threatens security of its citizens. Finance Secretary Ajay Bhushan Pandey in an interview said that crypto currency is unconstitutional as it is produced outside India and cannot be treated as currency but a commodity.
Although the government might not completely impose a ban on crypto, the law intends to create a facilitative framework under the guidance of RBI, exceptions will be provided to promote the underlying technology of crypto currency and its uses. However, many of the retail investors think differently.
Ex CTO of Coinbase and General Partner at Andreessen Horowitz, Balaji Srinivasan, an entrepreneur and an investor, believes that crypto ban is as bad as internet ban. In an interview he said that eventually in the coming years India will have to accept crypto as it already co existing in other countries as an alternative currency. India has great potential not just in terms of selling but also producing which makes it a strong contender amongst the developing nations.
Crypto Ban – FAQs
Why did RBI ban Cryptocurrency?
It is rumored that RBI wants to launch a digital currency of its own and is sparing the competition. The said digital currency is to be calledLakshmi-named after the Goddess of wealth.
What is Crypto Ban?
In 2018, RBI issued a circular to take down crypto currencies from the Indian virtual trade. According to the “Banning of crypto currency and regulation of official digital currency bill 2019” , the draft sentences 10 years of prison to anyone who mines, circulates or holds private digital currencies. This sentence surpasses the 7 years of imprisonment for money laundering.
What is #IndianWantsCrypto campaign?
Crypto companies WazirX and CoinDCX along with several others are running a hashtag campaign #IndiaWantsCrypto on twitter to raise awareness about the Crypto Ban bill and its consequences
Which are the major crypto startups in India?
Coin DCX, NUO, WazirX are some of the major crypto startups in India
Cryptocurrency is a thriving ecosystem, encroaching on conventional territory and is redefining the Finance sector. Over the last few years, Bitcoin users and transactions have averaged a growth rate of nearly 60% annually. Similarly in private and public investors have deepened the commitment to cryptocurrencies including Ethereum, Ripple, and Stellar, and several others too.
It started in 2009 with the release of bitcoin, which at that time was something new to most. But now everyone has heard of bitcoin and developed an interest in investing in cryptocurrency or starting a career as a trader has grown. Even though they do not have a long history, cryptocurrencies are attractive to many people.
Teeka Tiwari, a former Wall Street trader turned into cryptocurrency expert, recently discussed investing in cryptocurrency, explaining why now is the time to buy bitcoin. It is his expertise to talk about some exciting aspects of cryptocurrency and has some future predictions that we haven’t heard before.
Bitcoin has been the biggest player in cryptocurrencies since the beginning. We can surely say that bitcoin is going to stay in the future. However, what would be the best coins in the future is an important question to answer. According to Yahoo, there are four cryptocurrencies to invest in 2020- Bitcoin, Etherium, NEO, and EOS.
In this case, Tiwari believes that there are five coins that will be great to invest. He believes that these coins could turn $500 in to as much as $5 million. He stresses that people have a fear that prevents them from investing but that fear has to overcome.
Tiwari tries to motivate people to invest more and more in cryptocurrency to make profits. These are the last five coins he believes could turn $500 in to as much as $5 million.
Investment in Cryptocurrency
Why should You Invest in Cryptocurrencies?
If you are thinking of investing in cryptocurrencies, it may be best to treat your investment in the same way you would treat any other highly speculative investment.
Cryptocurrency has no intrinsic value. This makes it very prone to huge price swings, which in turn increases the risk of loss for an investor. Bitcoin, for example, plunged from $260 to about $130 within six hours on April 11, 2013.18.
You have to susceptible to that kind of volatility in this case. While opinion continues to be deeply debated about the merits of Bitcoin as an investment, supporters point to its limited supply and growing usage as value drivers, while detractors see it as just another speculative bubble.
How Cryptocurrencies Are Enhancing Financial Freedom
The Public opinion states that the traditional banking system often fails to address the needs of the masses during periods of political or cultural instability.
The cryptocurrency ecosystem can continue to thrive during such periods. People can not only depend on these assets for everyday payments but also use them to reinvest. Here are some ways in which cryptocurrency can be used to achieve financial freedom.
Growth of Crypto Assets
Price prediction
While risking the wealth on trading can be quite risky, price prediction stands as a significantly safer alternative.
Alluva is an app that allows users to predict crypto prices. Depending on the accuracy of the prediction, the platform rewards with a certain number of Alluva tokens (ALV). These tokens can later either be redeemed at partner websites, or traded for a different currency altogether.
Even though by no means an exhaustive list of how one can achieve financial independence with cryptocurrency, it is a good starting point for someone that is new to the technology or looking for new ways to capitalize on their existing investment.
Buying and Holding
Cryptocurrencies such as Bitcoin, Ethereum, and Litecoin have market capital in the billions. Bitcoin was trading between $1 to $2 in 2011, its current price sits around $10,000.
For people who are new to the crypto ecosystem, purchasing a small amount of these currencies and holding it for a few months is a viable strategy. Opening a new cryptocurrency wallet requires approval from a third party. If you have access to a smartphone or computer connected to the Internet, you can install and access a wallet within minutes.
Airdrops
New blockchain projects hand out a small number of free tokens to their followers and users. In the cryptocurrency industry, this marketing practice is called as an airdrop. The idea is that users are more motivated to try out a new service if they do not have to spend any money on it. Surprisingly, a large number of the tokens have real-world value, so you can simply trade them for another cryptocurrency or fiat currency instead of using them.
Day trading
Cryptocurrencies are traded on exchanges, which function similarly to those found in global equity markets. If you have a liking for technical or fundamental analysis and believe that you have good skills regarding the cryptocurrency market, this approach can be highly profitable. Day trading can be a risky endeavor given that some tokens can experience brief periods of high volatility now and then.
Initial Coin Offerings
By participating in an Initial Coin Offering, one becomes an investor in one such project at an early stage. Unlike listing, most ICOs are open to public investment.
Many major cryptocurrencies, including Ethereum, started as an ICO at some point and have delivered high returns in a few short years. However, it is very important to understand the project behind an ICO and undertake due diligence before any investment to ensure that you avoid scams.
Mining
Mining is the process of using computational power to verify transactions and create new units of cryptocurrency. Some cryptocurrencies such as Bitcoin cannot be mined using consumer hardware, others like Ethereum and Zcash can. Mining can be quite profitable, it does require some amount of investment in the form of hardware. The good news is that mining generates revenue, requiring little attention on your part.
Staking
Certain cryptocurrencies have adopted the concept of staking to verify transactions instead of mining. The approach allows holders to earn interest on their tokens as a reward for securing the network. Staking typically requires you to lock up a certain number of tokens in a live wallet. The more tokens are stake, the higher the reward. Also, there is no need to purchase expensive hardware.
Conclusion
A cryptocurrency aspires to become part of the mainstream financial system. While that possibility may not difficult to happen, there is little doubt that Bitcoin’s success or failure in dealing with the challenges it faces may determine the fortunes of other cryptocurrencies in the years ahead.
Digital payment is a way of performing payments without the use of digital currency. It is also known as electronic payment. In digital payments, both payer and payee rely on digital modes to send and receive money.
In today’s digital era, our dependency on smartphones exceeds the wildest possibilities. Millennials eat, live, and breathe smartphones. In fact, the use of wallets has declined ever since mobile phones started supporting e-wallets. Carrying change and holding debit cards has become a fad of the past. Digital payments have been ingrained in the way people perform transactions today.
The digital payments service sector is growing big, and top tech firms are coming up with innovative payment services of their own. Amazon with amazon pay, Ola money, Apple’s Apple pay and Google with Google Pay are amongst the latest offerings. The emergence of mobile wallets wasn’t an overnight phenomenon. Peter Thiel and Elon Musk’s PayPal was an early initiative. It paved way for several others.
India is not far away in terms of cashless economy; homegrown apps like Paytm and PhonePe are now facilitating payments for millions of Indians. Paytm launched the first active digital payment services in India. It was launched in August 2010 by Vijay Shekhar Sharma and was no less than a disruption. Around 130 million people use Paytm services in India. Facebook recently announced Facebook Pay which will be available on Instagram, WhatsApp, and Facebook.
Cryptocurrency, a digital asset, is being touted as the next step in digital payment services. Facebook has taken a step in this direction. Libra is Facebook’s cryptocurrency. Mark Zuckerberg claims Libra to be the future of banking and transactions, “Libra is a permissioned blockchain digital currency proposed by the American social media company Facebook.” Libra’s initial release is planned in 2020.
With Facebook’s Libra, Mark Zuckerberg wants to disrupt the way how money works. But such initiatives are riddled with issues. Several lawsuits followed post Libra’s announcement. To regulate the working of Libra, it shall be monitored by an independent association called Libra Association; this association would by governed by organizations like Uber, Lyft, PayPal, VISA, MasterCard, etc. Facebook will be maintaining a cryptocurrency wallet called CaLibra. Though Facebook claims Calibra will be maintained with high-grade security and have no effect on one’s privacy, many people don’t believe it.
“Libra is a global cryptocurrency built on blockchain to promote financial inclusion. Libra is digital, mobile, stable, fast, cheap and secure”. An organization independent of Facebook would oversee Libra. CaLibra, the mobile wallet to hold Libra, would be integrated in all the apps owned by Facebook such as WhatsApp, Instagram, and others. Transactions done with Libra would be the same as PayPal or any other medium available today.
The money from your bank account can be transferred into CaLibra that you can use at shopping malls and online stores. You can also get back your money i.e. Libra can be converted to physical money from Libra authorized people. The exchange of Libra currency and the mechanism behind the transactions’ executions still beg reasoning.
The whole Libra blockchain will be organized and maintained by a 28-member strong Libra association comprising Uber, Lyft, VISA, Mastercard, eBay Vodafone, etc. It is proposed to be a non-profit organization with its main office at Geneva, Switzerland.
Each member needs to give $1 million to get one vote in the organization. The organization will elect a representative to oversee the Libra council. Whenever you add money to your Libra account, it goes into the giant Libra reserve which in turn gives you Libra tokens. The value of Libra stays the same irrespective of the volatility in a country’s economy.
Facebook’s cryptocurrency shall cut down transaction fees and establish a global currency. Financial irregularities and hassles in transactions would become a talk of the past.
Like the concerns and question marks accompanying any major announcement, troubles arose for Mark Zuckerberg’s Libra initiative. In the first week of October, PayPal become the first to step out of the Libra association. The reasons for its withdrawal are not known yet. eBay, Stripe and Mastercard followed PayPal by leaving Libra Association.
Soon, Mark Zuckerberg was summoned by the US Congress. He asserted the launch of Libra would not be done without the approval from US regulators. Zuckerberg further emphasized on the need to take risk via innovation for ensuring US retains its position as the global leader. France and Germany blocked Libra and amended certain laws. Many banks and law makers are also changing rules related to monetary transactions.
After these issues, Facebook began losing momentum on Libra’s launch. With the criticisms and questions Libra faced, it’s clear that the world still holds scepticism on the idea of online payments and digital currency transactions through payment apps.
While certain parties continue to loath cryptocurrency, the technology of future is undergoing rapid improvisation. More complex algorithms ensuring hack- proof network and privacy-oriented transactions will catalyse the acceptance of cryptocurrency. The future of digital payment services, though shrouded with negativity and hesitance at present, will stay for decades to come.
Algorithmic trading is the use of a computer program with a defined set of criterions to carry through trades. The criterion for the system typically includes timing, price, or quantity.
Algorithmic trading makes use of complex formulas, combined with mathematical models and human oversight, to make decisions to buy or sell financial securities on an exchange. In theory, the use of algorithmic trading can generate trades and profit at higher frequencies than a human trader can.
Algorithmic trading (also known as algo trading) offers high-profit opportunities and streamlines trades, as it removes any possible human variables. Here is a short example of how it works; For example, a trader has these set as criteria:
The first specification is to buy 25 stocks when its 30-day moving average goes above the 100-day moving average. A moving average can be described as a series of averages of past data points to identify trends and smooth out the day to day price fluctuations.
The second specification is to sell when the 30-day moving average goes below the 100-day moving average.
Algo trading offers a systematic approach to active trading in contrast to methods that may be based on instinct and trader intuition. Just as a human trader would, with these two specifications the computer system will automatically read the moving average and the stock prices, as well as buy and sell orders when all the specifications are met. This removes the need for a trader to monitor the markets, live prices themselves or place the orders manually.
Benefits of algo trading are numerous:
All trades are executed at the best possible price,
Significant price changes are avoided,
Transnational costs are reduced,
Reduces the possibility of mistakes by human traders based on emotional and psychological factors.
ReduceS transaction costs
Connects to various exchanges and it integrates all the feeds
It runs automated checks on multiple markets, and finally, the orders are instant and exact. The algo trading system automatically does these actions by identifying strong trading opportunities based on the criteria.
Algo trading can be used in mid to long term investments like mutual funds, insurance companies, and pension funds. This is because they can purchase large stocks in large quantities as they do not want to influence stock prices with large volume investments.
Systematic traders, like trend followers, hedge funds and Paris trades; find efficiency in allowing the system to run automatically. Paris trades are a neutral market that matches short positions with long positions in highly correlated instruments such as exchange-traded funds, currencies, or stocks.
Algorithmic trading strategies
Most algorithmic trading strategies center around identifying opportunities in the market based on statistics. The following are common trading strategies used in algo-trading:
Trend-following strategies
Arbitrage Opportunities
Mathematical Model Based Strategies
Volume-weighted average price
Percentage of volume (POV)
Index Fund Rebalancing
Trading Range (Mean Reversion)
Time Weighted Average Price (TWAP)
Percentage of Volume (POV)
Implementation Shortfall
Beyond the Usual Trading Algorithms
Implementing the designed algorithm on the computer is the last step of algorithmic trading. Another important thing that one must do before applying the algorithmic system is to backtest. Backtesting is trying out algorithms on past trading history to see if it would have increased your profits then. Always remember the more complex the algorithm the more backtesting is required to make sure everything is operational before putting it to action.
Algorithmic trading is not easy to set up or maintain if you have limited computer knowledge. Luckily, there are many award-winning traders that can help you start trading, these traders can help with setting up a server and the upkeep as well as the nuances of a new system.
Algo trading is new trend in India. There are many algo trading platforms in India:
Alan Joseph
