This statement is especially relevant for candidates of the Indian Administrative Service (IAS), as the relevance of digital currencies grows at present with increasing effects on global economics and policies. Digital currency is one of the topics where questions come from the syllabus, hence knowing it properly will help you answer with confidence.
Digital currency is a currency that exists only in digital form, without physical representation, such as paper or coin currencies. It is generated, stored, and transferred by using digital means, usually cryptographic. The foremost recognized example is Bitcoin, but there are thousands of other e-currencies, each having its own properties and purposes.
Digital currencies have become more pivotal in India because of the government’s emphasis on cashless economy. Knowledge of the impacts of digital currencies on monetary policy, financial inclusion and national security will be very important for aspirants preparing for IAS exams.
The topic can also consist of the revenue implications emerging with countries worldwide in implementing governing controls regarding these digital currencies and their benefits, demanding in terms of transparency and lower transaction costs, and financial innovation.
The study of digital currencies will throw light on some of the complexities involved in running a modern economy which are very relevant to the IAS examination.