The $230 million WazirX hack: How safe are your cryptocurrencies
volatility is what traders live for and they use crypto exchanges to trade cryptocurrencies. In India, cryptocurrencies are not regulated officially. But the Indian government and the Reserve Bank of India have overtly and covertly hampered the growth of local firms in this space.
In 2018, RBI issued a circular directing all entities regulated by it to stop providing services to individuals and platforms dealing with cryptocurrencies. In March 2020, the Supreme Court of India struck down RBI’s 2018 circular, stating that it was disproportionate and violated the right to trade. This ruling allowed crypto exchanges to regain banking services.
But despite the Supreme Court ruling, the Indian government has continued to express skepticism about cryptocurrencies. RBI has continued to caution users, holders, and traders about the potential risks. Even after more than a decade, the Indian government is still formulating a comprehensive regulatory framework for cryptocurrencies.
Since this is the reality, it’s pertinent for investors to understand how the system works. Cryptocurrencies like bitcoin or ethereum can be classified as a monetary asset. The difference between this type of currency and currencies like the rupee or the dollar is that a cryptocurrency can be sent over the wire without depending on a single trusted intermediary.
An asset that has demand will command a price in the market. Any asset must have a sanctuary for safekeeping and a stage upon which it can be traded. Fiat paper money such as the rupee or the dollar can be stored in a physical wallet or in a bank.
It can be exchanged in person or transferred across distances using payment gateways. Your cash is a bearer asset. You can exchange it physically with
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