What is Cryptocurrency? How does it affect global society? Has it been affecting Indian society also?

Cryptocurrency is a digital medium of exchange secured by cryptography and recorded on a decentralised blockchain ledger, operating without central banks or intermediaries — Bitcoin, launched in 2009, was the first. India’s law treats such tokens as ‘virtual digital assets’.

Effects on global society

• Financial innovation: peer-to-peer payments, cheaper and faster cross-border remittances, and access for the unbanked; El Salvador even adopted Bitcoin as legal tender in 2021.
• New asset class attracting institutional investment, but with extreme volatility — episodes like the 2022 FTX collapse wiped out household savings worldwide.
• Facilitates ransomware, darknet trade, terror financing and sanctions evasion due to pseudonymity.
• Heavy energy footprint of proof-of-work mining raises climate concerns.
• Challenges monetary sovereignty, pushing central banks toward their own digital currencies; dollar-pegged stablecoins increasingly substitute fragile local currencies in high-inflation economies.

Effects on Indian society

• Yes — India consistently ranks at the top of global grassroots crypto-adoption indices, with a young, mobile-first investor base spread beyond the metros.
• Speculative trading has exposed youth to sharp losses, fraudulent exchanges and phishing scams; the GainBitcoin case illustrates large-scale cheating.
• Policy response: the Supreme Court set aside RBI’s banking ban in 2020; since 2022, gains are taxed at 30 per cent with 1 per cent TDS, and exchanges fall under anti-money-laundering law.
• RBI has piloted the digital rupee (e₹) since 2022 as a sovereign alternative, while officials warn against private tokens; a Web3 startup ecosystem has meanwhile emerged, though many founders migrate abroad seeking regulatory clarity.

Cryptocurrency is thus a genuinely global social phenomenon — democratising finance while amplifying risk. As G20 president, India steered the IMF–FSB roadmap for coordinated regulation: the mature course is neither prohibition nor laissez-faire, but investor protection, taxation and globally synchronised oversight.