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June 14, 2026
The Dispatch

Definition

Cryptocurrency

A cryptocurrency is a digital asset that uses cryptography and a blockchain to record transactions without a central authority; in India it is a taxed VDA, not legal tender. This is informational, not advice.

A cryptocurrency is a digital token whose ownership and transfers are recorded on a decentralised, cryptographically secured ledger (blockchain) rather than by a bank or government. Bitcoin and Ether are well-known examples.

In India, cryptocurrencies are not legal tender and are classified as Virtual Digital Assets for tax: gains are taxed at a flat 30%, a 1% TDS applies on transfers, and losses cannot be set off. The RBI has separately introduced the Digital Rupee (CBDC), which is sovereign money and entirely different.

Cryptocurrencies are highly volatile and high-risk, with prices that can swing sharply. This entry is informational only and not investment advice; understand the technology, risks and tax rules before any exposure.

Related terms

  • Virtual Digital Asset (VDA)Virtual Digital Asset is the term Indian tax law uses for cryptocurrencies, NFTs and similar tokens, bringing them under a specific, stringent tax regime. This is informational, not investment advice.
  • BitcoinBitcoin is the first and best-known cryptocurrency, a decentralised digital asset with a capped supply, recorded on a public blockchain. In India it is a taxed VDA. This is informational, not advice.
  • BlockchainA blockchain is a shared, append-only digital ledger where transactions are grouped into cryptographically linked blocks, making records hard to alter without consensus.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.