What is Cryptocurrency? How does it affect global society? Has it been affecting Indian society also?(Answer in 250 words)

Cryptocurrency is a digitally native asset that uses cryptographic validation and distributed-ledger technology; many forms operate without a central issuer, though designs and regulatory status vary.

Global social effects

• Blockchain enables peer-to-peer transfer, programmable contracts and potentially cheaper remittances and financial access.
• Price volatility, scams, ransomware, money laundering, tax evasion and consumer losses create significant risks.
• Mining can consume substantial energy; speculation can widen inequality, while decentralised finance challenges conventional intermediaries.
• States face dilemmas involving monetary sovereignty, capital flows, sanctions and financial stability.

Impact on India

• Indian users and start-ups have participated in trading, exchanges, blockchain development and cross-border technology markets.
• Unregulated promotion exposes households to volatility, fraud and privacy risks, especially where financial literacy is weak.
• The sector raises questions on taxation, consumer protection, exchange compliance, capital controls and the future of a central bank digital currency.

Way forward

Technology-neutral regulation should distinguish crypto-assets from payment money, enforce AML/KYC and taxation, protect consumers and support useful blockchain applications without compromising macroeconomic stability.

Keywords: distributed ledger; decentralised finance; AML/KYC; monetary sovereignty; CBDC.