Cryptocurrency and the Indian Monetary System

Abstract

“Change is the only constant,” wrote the ancient Greek philosopher Heraclitus of Ephesus. And in today's world, one of the greatest changes is the changing nature of money. As the world embraces the ease in accessibility to high-speed internet services across all spectrums, the medium of exchange is transforming from fiat currency to virtual and cryptocurrencies. The exchange of cryptocurrency heavily revolves around speculation by professionals, and institutional investors dealing with large sums of money. The global adoption of cryptocurrency has increased over the last few years and has seen an 880% increase in year-to-year transactions in the last year, reflecting the increased acceptance in cryptocurrency usage in emerging markets. India ranks second in the overall crypto-adoption index ranking, backing the increased interest of Indian investors in the cryptocurrency markets. The major focus of this paper is regarding the next phase of transition into digital and cryptocurrency and its implications on monetary policies with a specific focus on the Indian monetary system.