2021 · GS Paper 1 · Q19 · 15 marks
What is Cryptocurrency ? How does it affect global society ? Has it been affecting Indian society also ?
In short
Cryptocurrency is a decentralised digital asset that globally offers cheaper transfers but also brings speculation, crime, energy use and threats to monetary sovereignty, and it has clearly affected Indian society. India topped Chainalysis's adoption index in 2023, faced frauds like the 2024 WazirX hack, and taxes crypto gains at 30% since Budget 2022.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 275 words
Trust without intermediaries
Peer-to-peer transfers cut remittance costs and help the unbanked hold value.
Sovereignty tested
El Salvador made Bitcoin legal tender in 2021, while China banned trading and mining the same year.
Speculation and crime
The FTX collapse (2022) wiped out savings, and the 2021 Colonial Pipeline ransom was paid in bitcoin.
Environmental cost
Proof-of-work mining uses electricity on the scale of a mid-sized country.
Youth speculation
Young urban investors treat crypto as a shortcut to wealth in a tight job market.
Frauds
The GainBitcoin Ponzi scheme and the 2024 WazirX hack of about 230 million dollars hurt small investors.
Regulatory churn
The RBI's 2018 ban fell in IAMAI v. RBI (2020); Budget 2022 imposed a 30% tax and 1% TDS, and exchanges came under the PMLA in 2023.
Clear law and coordination
License exchanges and build on the IMF-FSB paper endorsed at India's G20 presidency (2023).
Investor protection
Mandatory KYC, proof-of-reserves audits and financial literacy drives would shield small savers.
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This chapter in the exam
Effects of globalization on Indian society7 questions
Asked in 6 of 14 sittings since 2013
- 2026Evaluate the impact of globalization on Indian youths with reference to social, political, economic and cultural spheres.
- 2025Do you think that globalization results in only an aggressive consumer culture ? Justify your answer.
All 7 questions, sorted by sub-topic, with model answers and practice.
Question from the official UPSC Civil Services (Main) Examination 2021 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.