What is the Financial Market?

Indian Financial Market Simplified!

It is close to the month-end and you realize you need to go for your monthly shopping. Let’s say you need to get some snacks, fruits, clothes, personal care products, stationery, and utensils but you don’t have the time to go around the town visiting different shops for different items. Where would you go? Supermarket! A supermarket would be like your one-stop solution for all the things you need.
Now, think of the Indian Financial Market as a supermarket, where all kinds of financial assets/instruments can be bought and sold. Would you like to know more? I got you! In today’s blog, we will be understanding what is a Financial Market. Who are the market participants? Why is it important? and What is the structure of the Financial market in India? So, let’s get started!

What is the Financial Market?



I guess the name suggests itself. The Financial Market is a marketplace, where buying and selling of various financial asset/instrument take place. The financial assets being traded in this market can be stocks, bonds, currencies, commodities, etc. It brings together the buyers and the sellers who are interested to trade in a particular instrument. So, the stock market, bond market, forex market, commodities market, and any other market trading in financial instruments together, fall under a single umbrella, which is the Financial market. These markets operate in a proper structure but, more on that later.

Who participates in the Financial Market?


Participants include investors (institutions, individuals, government, etc.) wishing to invest in various investment avenues, entities /governments wishing to raise funds, financial intermediaries (exchanges, brokerages, banks, mutual funds, etc.) and regulatory bodies (RBI, SEBI, etc.).

What is the importance of the Financial Market?


  • Enables smooth circulation of Funds :

The market participants continuously interact with each other. Thus, funds flow efficiently from investors to businesses/government and vice versa.

  • Encourages people to invest :

Various financial instruments like stocks and bonds have given better returns than traditional options like FD’s or Savings. Improved transparency, proper regulation and rising financial literacy in India have ultimately encouraged people to trust and earn good returns by investing in markets.

  • Reflection of economic growth :

    I think the 2008 crisis would be the best example to understand this point. The financial market and economic growth go hand in hand. The performance of financial markets is reflected in the strength of the economy.


Android ios

Structure of Indian Financial Market

The Financial market in India is divided into Money Market and Capital Market.

1.Money Market :
It is a marketplace where short-term borrowing and lending of funds take place. This happens through various money market instruments with maturities ranging from a day up to a year. Banks usually use money market instruments to borrow money and meet their short-term liquidity requirements as per RBI guidelines. Types of money market instruments include T-bills, Certificate of Deposits (CD), Commercial papers (CP), Money market MF, etc. Individuals and institutions invest their excess or idle funds in these instruments and earn interest in a short period.
2.Capital Market :
In simple words, the Capital market is a marketplace where funds can be raised by businesses and governments for more than a year. These raised funds are utilized for their plans and growth. Interested investors can lend their surplus funds to earn good returns. This happens via various capital market instruments like stocks, bonds, etc. So, the Stock market and the Bond market comes under this umbrella. If you want to understand what bonds are, you can check out my YouTube video.


The Capital market is further divided into Primary markets and Secondary markets.

  • Primary Market :
    It is a marketplace where companies and the government raise funds for the long term by issuing shares or bonds for the first time to the public. Because of this, it is also known as the New issue market. Here, the transaction happens between a buyer and the company/government issuing the security. When a company comes up with an IPO (Initial Public Offer), it takes place in this market.

    Let’s take the example of Happiest Minds IPO. Investors who applied for the IPO had to go through the Primary market. To do so, they submitted their bid price to the company via their brokers. Later, the investors who got the allotment in this IPO received the shares directly from the company via their brokers again.
  • Secondary Market :
    It is a marketplace where already-issued securities from the primary market are bought and sold. Hence, it is also known as the after-market. Here, new securities are not created, unlike the primary market. Trading and investing take place in already existing shares or bonds. A company or government is usually not involved in the transactions. It purely happens between a buyer and a seller through exchanges

    Let’s continue with our previous example of Happiest Minds IPO. There might have been so many investors who were interested in the company but did not get the allotment. Also, there might be investors who got the allotment but want to sell their shares. So, these investors will now buy and sell their shares when the company gets listed on the stock exchanges. This is nothing but the secondary market. Once the company is listed, buyers and sellers can trade in these shares on the stock market.

    There’s a lot more to learn about the primary and secondary market. If you are keen on learning what exactly goes around in these markets and how they work in detail, you can check out my course “Basics of Stock Market” at the link below.

Bottom line:

Our Indian financial market has come a long way since Independence. It has opened up so many options for us to invest in and to take advantage of growing businesses and the national economy. It’s always a better idea to understand the overall structure and operations of the Financial market before we make trading or investing decisions.

Click the following image to know what is Nifty and its calculation.

Nifty Blog

What is the Financial Market?
How I opened Demat A/C with Zerodha?

How did I open my Demat A/c with Zerodha?


What is a Demat A/c?

Demat A/c is simply short for Dematerialized A/c. Its purpose is to hold all your Financial Securities in an electronic form, eliminating the need and hassle of physical handling of securities and related documents.

There are 2 depositories in India, namely National Securities Depository Ltd (NSDL) & Central Depository Services Ltd. (CDSL). These depositories hold all the securities in our Demat A/c, in order to offer efficient trading and settlement in the markets. For this, we must open a Demat A/c with a broker (also known as a depository participant) recognized by SEBI.

Just like we have a Bank A/c to keep our cash, we need a Demat A/c to store our securities in an electronic form.

Today, I am going to share my story of how I opened my Demat A/c with Zerodha. There are 2 ways through which this is possible: offline & online. I opened my a/c online; however, I will quickly walk you through the offline process as well. So, let’s begin!

a) Offline account opening

First, you need to download the application forms from their website. Take a printout, fill it up, sign it and send the application to Zerodha via courier at the address mentioned on their website. 
After this, you should schedule a meeting with a Zerodha representative who will complete your in-person verification. The representative will guide you with all the documents needed and take signatures wherever necessary, to complete the account opening process. Right now, all of this might take more time than before due to the pandemic. However, you can open an account online as I did. How? Let’s find out...

b) Online account opening

Before I started with the process, I ensured to keep a scanned copy of my PAN card, Aadhar, signature, and canceled cheque/bank statement in the device from which I was opening my account. 

Step 1: Mobile Number & Email verification

I visited the Zerodha website and clicked on the “Sign up” section to start my account opening procedure. The first step was mobile number verification wherein I had to enter my number. After I hit the ‘Continue’ button, I received a 6-digit OTP number which I had to key in on the screen. 

Next was email verification. I entered my email id and received a 6-digit OTP in my mailbox. I entered it and pressed continue.

Step 2: PAN verification

For this step, I had to enter my PAN and DOB as per my PAN. The portal asked me to pay a sum of Rs. 300 as an account opening fee. Various payment options like UPI and Net banking were available for the same. I had to fill in all the necessary bank details to complete the payment.

Step 3: Digilocker

After the transaction was successful, the Zerodha portal redirected me to the “Digilocker” window. Digilocker is an online locker wherein we can keep our government-issued documents in an electronic form. I had to separately sign in for Digilocker with my Aadhar, so Zerodha could access necessary documents uploaded in the locker.

Step 4: Personal Details

This step was very simple. Here, I just had to enter my personal details like Name, occupation, trading experience, and bank details carefully. 

Step 5: Webcam IPV

For In-person verification (IPV), all I had to do was give my webcam access to Zerodha, write the code flashed on the screen on a blank paper, hold it up to the camera and click a picture. I had to save this picture as my IPV and move ahead with e-signing.

Step 6: E-sign

E- signing was done by uploading my PAN, Aadhar, Income Proof, and signature which I kept handy before starting the process. A Digio dialog box appeared on my screen for registration with the NSDL. I verified my email again. After this, I could see my complete form, check everything, and click on ‘Sign now’.

Voila! I successfully applied for opening a Demat A/c. Within 24 hours I received a mail from Zerodha with a PIN to activate my account. I was instructed to Log in using the same and change my password immediately and that was all.

Isn’t opening a Demat a/c easy peasy lemon squeezy? So, hurry up and click the link below to open your Demat A/c today! 


Click the following image to read about financial markets.

Financial Markets
How I opened Demat A/C with Zerodha?

Imagine this... It’s a beautiful day. Your salary just got credited and you decide to treat yourself a little. You go on Amazon to buy some clothes. After hours of scrolling, you finally find a T-shirt you like BUT!!! The customer rating for that T-shirt is very low. Would you still buy that T-shirt? Hold that thought…Just like every product available on Amazon has a rating, we all have a rating based on our credit history, called Credit Score. So now tell me, would you, as a bank, give a loan to someone with a Low Credit Score? The answer to both the questions is a big fat NO, A low score is a clear red flag, isn’t it? Now that you have got the crux of this, let’s understand what CIBIL score is and how you can improve it.


What is CIBIL?

Before we get into what is CIBIL score, let’s learn about CIBIL. Credit Information Bureau (India) Limited (CIBIL) is the oldest and most popular Credit information Company, authorized by RBI. They maintain credit records of individuals and businesses. The member banks and financial institutions submit their customers’ credit information to CIBIL every month. CIBIL then analyzes this data, calculates our Credit Score, and creates our Credit Information Report (CIR) which helps determine the credit score.

What is CIBIL Score?

To put it simply, our CIBIL score is like a rating given to us by CIBIL based on our credit histories such as borrowing and repayment. Banks or lending institutions use this score to understand our creditworthiness before approving any loan to minimize default risk. This score ranges from 300 to 900. The higher the score higher is your chance of getting the loan and vice-versa. If you have a good CIBIL score you may get a lower rate on a personal loan, credit cards, and lower insurance premium. However, too many loans, untimely repayment, and high utilization of credit limits can poorly impact your credit score. If you have never taken any loan your CIBIL score would be -1.

How can you check your CIBIL score?

CIBIL provides CIBIL score and Credit Report once a year for free. You just need to create an account with CIBIL online and apply for your free annual credit report. They also offer unlimited access plans allowing you to track your CIBIL score and Credit Report every 24 hours and other credit monitoring services for some charges applicable. All you need to do is visit their website and subscribe!

Ways to improve/maintain your CIBIL Score

  • Timely Repayment

Be it your credit card bills or EMIs, making timely payment of your dues is one of the important factors in improving your CIBIL score. If you miss your repayment deadlines, you are charged interest on the interest you are already paying. Ultimately, this reflects poor creditworthiness and drags down your CIBIL score.

  • Check your Credit Report

Monitoring your Credit Report will help you realize where you are spending more and what caused your score to slip. If there are any errors in your report because of incorrect information or delay in updating your report, you can put up an enquiry with CIBIL, and get it corrected. This will get your score right back on track.

  • Pay attention to your Credit Mix

You must have a good credit-folio including secured and unsecured loans. Secured loans include Home loans, car loans, etc. whereas Unsecured loans include personal loans, credit cards, etc. A good balance between the two indicates better credit management on your part. However, if a person highly relies on unsecured loans then it is not favourable.

  • Credit Utilization

Credit utilization of above 30% on your credit card can adversely impact your CIBIL score. Just because you have a certain credit limit does not mean you use it all at once. On the other hand, not using your credit card at all will also affect your score poorly. The only solution to this is to keep a track of your spending which will help in limiting your credit utilization. If you are not using any of your credit cards it is best to cancel them.

  • Say no to Multiple loan application

Every time you apply for a loan; the bank initiates a hard enquiry on your credit profile to understand the default risk involved. This hard enquiry is reflected on your credit report for two years affecting your CIBIL score. So, if you apply for multiple loans at the same time, it will open several hard enquiries on your account which will damage your score. Additionally, if your loan application gets rejected, it could cause more harm to your CIBIL score. So, next time you apply for a loan or credit card keep this in mind.

  • Avoid closing Old Debt Accounts

By now you must have understood that the CIBIL score is all about your past credit habits. Therefore, it is advisable to keep your old loan accounts open even after you have repaid them. If you have had a good credit record for past loans then it will contribute positively to your CIBIL scores.


Healthy credit habits can help you improve and maintain a good CIBIL Score. It will undoubtedly pay off when you need to take a loan. Tracking your expenses regularly can help you make conscious spending decisions. Manage your debt smartly and pay your dues in advance wherever possible. Your CIBIL score is a crucial factor in availing of loans and credit cards. Hence, keeping an eye on it is a must. Remember, Perseverance is the key to success, or in this case to avail credit😉
KEI Industries Fundamental Analysis


Ye Dil mange more! So welcome back to this special blog where we discuss one more fundamentally strong stock under Rs. 1000. I am sure many of you might have felt at some point in life that investing in good stocks comes at a cost and I wanted to debunk this myth. That is when I started my research on fundamentally strong stocks under Rs. 1000 and this stock is one of those 3 which I shortlisted. I am sure you already know the other 2 from today’s YouTube video. So, without prolonging your excitement let me disclose the third stock - KEI Industries Ltd. Stay tuned till the end of this blog to understand everything about this company. Let’s dive in!
What does the company do?


KEI is one of the leading manufacturers of cables and wires (C&W). But what is the difference between cables and wires? A wire is a single or a group of conductor strands of copper or aluminium whereas a cable is two or more insulated wires wrapped in one jacket. The company supplies a broad range of C&W products and plays an integral role in the development of core sectors of the country, such as Real Estate, Infrastructure, Power, Steel, Fertilizer, Refinery, Transportation, Energy, and Building Materials among many others.

Product Portfolio
Let’s have a look at the product portfolio of the company.

I hope that cables and house wires need no further explanation. Coming to Winding wires, these wires are used for winding submersible pump motors of all sizes. They are used for both Domestic & Industrial applications. Stainless Steel Wires are used in Engineering, Chemical, Construction, and many other industries besides the various type of applications in the manufacturing of kitchenwares, ornaments, utensils. Talking about EPC, the company has forward integrated into Engineering, Procurement and Construction (EPC) services for utility projects having significant cabling requirements. They offer end-to-end turnkey solutions including engineering, consultancy, and project management for Extra high voltage substations, transmission lines, underground cabling, overhead lines, etc. These services are being delivered across core sectors like power, renewables, railways, refineries, petrochemicals, cement, steel among others.

Business Segments
Have a look at the company’s business segmentation and its revenue contributions.


If you observe well under revenue by product segments, revenue for cables and turnkey projects have gone down. Why is that? While reading the conference call transcripts, I found out that the company is reducing its stake in the EPC business due to the elongated working capital cycle, slow recovery of payments, and low margin profile. Due to this, they will limit its contribution to overall sales at 10-15%. This is a strategic decision where they plan to redirect the freed-up resources to the retail segment with an aim to generate 40-50% of overall sales from this segment in the medium term.
Industry Analysis

1. Global W&C Industry
The global wires and cables market size was estimated at USD 183.14 billion in 2020, as per a report published by Grand View Research. It is expected to expand at a CAGR of 4.4% over 2021-28, to reach USD 260.16 billion by the end of 2028. This growth is attributable to the increasing use of cables and wires across the world for transmission and distribution of power, for incremental application in the telecom sector and data centers. Increasing urbanization and commercialization are expected to further bolster investments in the real estate industry, thereby, driving the demand for low voltage insulated wires and cables.


2. Indian W&C Industry
The Indian cables and wires market is projected to grow at a CAGR of 4% between 2021 and 2025, to reach USD 1.65 billion in 2025. Out of a total capital expenditure planned by the government, segments such as energy, roads and highways, urban infrastructure, and railways cumulatively account for ~71% of the total investments, with the energy sector commanding the highest share at 24%. This underscores substantial and sustainable demand for the C&W industry in the coming years.

About the company
KEI Industries Ltd was established in 1968 as a partnership firm under the name Krishna Electrical Industries. Their products are sold in 50+ countries with offices in 5 countries. They enjoy a 7% market share in India’s organized W&C industry and 12% in the institutional segment. They have a network of 1,655 distribution partners across India. The company was able to backwards integrate services by setting up in-house manufacturing of PVC. They continued to be co-sponsors of IPL for the fifth year. KEI was the principal partner to the Rajasthan Royals Team.

1. CAPEX Plans
As stated by the management in the investor’s conference call, the company will continue to invest in increasing the capacity. In the previous years, they had increased housing wires capacity with the setting of a new facility. They are now looking at investing around Rs. 600-700 Crore from internal accruals for growing their capacities for LT, HT, and EHV cables to maintain a CAGR of 17% to 18% against a CAGR of 15% achieved during the last 15 years. The CAPEX will be undertaken over five years. Meanwhile, the company has sufficient capacity to cater to the market demand over the next years by when new production lines will also be available.

Financial Analysis
The 5-year CAGR for Revenue, EBITDA, and PAT are well above average. If we look at quarterly numbers for the same parameters, we can see degrowth on a QoQ basis but YoY growth looks good. The QoQ degrowth happened due to the non-clearance of some orders of EHV cables and the second lockdown in this quarter however, the management is confident that the order will be reflected in Q2.

Apart from this, the company has good ROE and ROCE with low DE. The Current ratio looks good as well. There is no pledging of shares. Currently, the stock appears undervalued when compared to industry P/E.

Technical Analysis
The stock has been in an uptrend. Recently, an ascending triangle was observed, however, the price has been consolidating after it gave a breakout. As per Pivot levels, the next resistance is around 788.64 and 810.20 and support is around 714.80 and 694.70. RSI has been stable at around 60. MACD is bullish but the histogram is showing weakening bullishness due to the recent consolidation.
I hope you enjoyed learning about this company and it added value to your knowledge basket. If you haven’t watched the video on the other 2 interesting yet pocket-friendly stocks which I discussed on my YouTube channel today, click on the image below. Make sure to drop your views in the comments section if you would love more of such videos and blogs. Until next time!


KEI Industries Fundamental Analysis
GuFic Biosciences Limited Fundamental Analysis


I know pretty well that one stock is not enough for Stockoholics like us. Therefore, in this blog, we will be discussing another gem from one of my Thursday Livestreams. The name of the company is Gufic BioSciences Limited. I found this gem along with the other shiny gem, Oriental Aromatics Ltd. whose video is already out on YouTube. If you have liked that video then keep reading this blog as I have covered the whole company analysis of Gufic BioSciences Ltd. here for you.

What does the company do?
The company manufactures pharmaceutical, herbal, consumer care, and API (Active Pharmaceutical Ingredients) products. Out of these four, the first three are very easy to understand but what is the fourth product? Well, APIs are chemical compounds that are the most important raw material to produce a finished medicine. For instance, Paracetamol is the API for Crocin. The company is also into contract manufacturing (Domestic & International). Contract manufacturing occurs when a small business hires another company to produce its products. It is a form of outsourcing.

About the Company:

Founded by Mr Shri Pannalal Choksi in the year 1970, the Choksi family has more than five decades of experience in the Pharma sector. The company has 3 Domestic Brands:
1. Gufic Super Speciality Business includes Critical care medicines and Infertility products.
2. Gufic Mass Speciality Business includes products like Nutraceuticals and Natural products, Pain /Arthritis, Immune Boosters, respiratory products, and mass Anti-infectives that are supplied in bulk to General Practitioners, Pediatricians, Gynaecologists, and Physicians.
3. Gufic Speciality Business includes Gufic Stellar (Range of Unique Ortho-Gynaec products) & Gufic Aesthaderm (Range of Derma-Cosmetics mainly licensed).
Interesting points about the company:
They are pioneers in Lyophilization and one of the largest manufacturers of Lyophilized injections in India. Lyophilization is a water removal process typically used to preserve perishable materials and to extend shelf life. This process is done to avoid degradation, and it improves the stability and solubility of the medicine. Not only this, but they are also the pioneers in antibiotics like Amoxicillin and Dispersible Kid Tab.
Sector Analysis:
a. Globally, India ranks 3rd in terms of pharmaceutical production by volume and 14th by value. The domestic pharmaceutical industry includes a network of 3,000 drug companies & ~10,500 manufacturing units.
b. According to the Indian Economic Survey 2021, the domestic pharmaceutical market is expected to grow 3x in the next decade. It is estimated at US$ 42 billion in 2021 and is expected to reach US$ 65 billion by 2024 and further expand to reach ~US$ 120-130 billion by 2030.
c. Indian Active Pharmaceutical Ingredient (API) industry is ranked 3rd largest in the world. The majority of APIs for generic drug manufacturing across the globe are sourced from India, which also supplies approximately 30% of the generic APIs used in the US.
(Source: IBEF & Annual Report)

Annual Financial Analysis:(Figures in Rs. Crores)
Quarterly Analysis:

Financial Metrics:

I hope you enjoyed reading about this small-cap company which must have fulfilled your excitement. If you have not yet watched the video on Oriental Aromatics Ltd, click on the image below. Until next time.

GuFic Biosciences Limited Fundamental Analysis
How to open a MetaMask Wallet?

How to open a Metamask wallet?

Metamask is said to be a good crypto wallet option for a number of Crypto and Decentralized Finance (DeFi) applications. Metamask can be used in your Chrome browser as an extension, and it also has a mobile app.

In this blog, we will take you through the steps for creating a Metamask wallet:
Step 1:
Visit the MetaMask website


Step 2:
Click on ‘Download’ and then choose your browser. Then install the extension for your specified browser.


Step 3:
The next step will be to create an account. Click on the MetaMask icon in the top right corner of your browser. This will be available under the puzzle piece icon. Click on ‘Get Started’ and then ‘Create a Wallet’.


Step 4:
Your next step will be to create a new password. And after agreeing to the T&C, your MetaMask wallet will be created!


Step 5:
Once your wallet is created, you will be able to see your “seed phrase”. This is your secret seed phrase which should not be shared with anyone and stored safely. A good practice to safely store this is to write it down on a piece of paper and keep it in a safe location.


Step 6:
After this, you will have to correctly select the order of your seed phrase and click ‘Confirm’.
All done! Your MetaMask wallet is now active. Your wallet address is the number at top of your wallet starting from 0x. You can transfer Ether and other crypto tokens to this wallet address.


How to open a MetaMask Wallet?
What is Cryptocurrency?

Is Cryptocurrency the New Black?

Cryptocurrencies like Bitcoin, Ethereum, Dogecoin, etc. are becoming familiar and popular amongst the global masses, every passing day. Famous personnel like Bill Gates, Elon Musk, Serena Williams, Snoop Dogg, Mike Tyson, and many more, are believers in Cryptocurrencies.

So, what is Cryptocurrency? what are its advantages and disadvantages? Is it legal? what is Blockchain? and finally, what is a bitcoin?...

My Goodness! So many questions. But don’t worry. I have the most simplified answers to all such mind-boggling questions. Stay tuned till the end of this blog to find out.
What is Cryptocurrency?

Let us break down this concept into two parts. The first is Cryptography and another is Currency. Currency needs no explanation so, let’s begin by understanding Cryptography with an example. You might have heard about Morse Code. It is nothing but a standard sequence of dots and dashes which was used by the military to communicate secretly during WW2. This ensured that only the receiver could decode the messages meant for them and not the enemy.
Cryptography is somewhat similar to this practice. It uses complex mathematical codes to convert plain text into a coded series, which can only be decoded by the receiver of the message.
Putting it all together, Cryptocurrency is a form of digital currency secured by cryptography. This ensures secure online payments through a decentralized network of a large number of mega-computers spread across the world. They are intangible and independent of any underlying.
Special Features
  • Decentralized
    In simple terms, here Decentralize means free from any central authority. Cryptos work on a peer-to-peer network of computers, with an internet connection, across the world. You can trade in Crypto through centralized exchanges like WazirX. But there is no such central regulatory body (like SEBI, SEC, etc.), government or organization controlling these Cryptos as an instrument. Thus, making it free from political interference and influence.
  • Secure
    Since cryptos are backed by a technology called the blockchain, there are very few chances of the system getting hacked. This makes it secure. Blockchain records every transaction and these records are openly available to the public. This further ensures its transparency. Now, how does this Blockchain work? It is discussed in the latter part of this blog.
Advantages of Cryptocurrencies
  • No intermediary required
    If we were to transact the traditional way, we would need an intermediary like a bank, payment gateway, etc. to conduct an online transaction. However, as cryptocurrencies are decentralized, it has eliminated all such intermediaries. We can directly send cryptos to anyone, without a third party like our banks.
  • No geographical barriers
    Cryptos can be transferred to anyone & anywhere across the globe. It goes beyond your banks’ national and international networks.
  • Swift
    The crypto transaction can happen in as low as 4-5 seconds to a maximum of 10 minutes, depending upon the underlying technology being used by the currency.


Disadvantages of Cryptocurrencies



  • Irreversible transaction
    Just like we have a unique UPI ID for online transactions, cryptocurrencies have public and private keys. To transact, we need to input this key and the cryptos will be transferred to that key holder. However, if we make an error while entering this key, the cryptos will be transferred to the wrong key holder. Unfortunately, these transactions cannot be traced and you might lose your cryptocurrencies, as a refund is not an option.
  • Host of illegal activities
    Cryptocurrencies are believed to be a host of illegal activities due to their anonymity feature. Some cryptocurrencies ensure anonymous transfers with no maximum amount limit which has encouraged money laundering and tax evasion activities in the world. In such cases, it becomes difficult for Governments to trace such fraudulent actions.

Is it Legal?

Yes & No! There is no law prohibiting Indians from buying/selling cryptocurrencies in India. It has now evolved as a recognized investment avenue because of the numerous successful investment stories being circulated in the world.
However, one must note that cryptos are not a “legal tender” in India as it is not regulated/guaranteed by the Central Government. Now you might ask, “Legal tender? what's that?...
Legal tender is the money issued, recognized, and accepted by the law of a country. Can you pay someone using Rs. 500 or Rs. 1000 notes? The answer is, NO! Because these notes stopped being legal tender since the demonetization announced by the Government.
Where does the Blockchain stand in this picture?


Well, Blockchain is the technology supporting the transfer of Cryptocurrencies. However, it also finds application in other industries like healthcare, logistics, e-commerce and many more. Blockchain is a global online database, which can be viewed by anyone, anywhere with a computer and an internet connection. In the case of Cryptos, it records the data of all the transactions taking place around the world. Due to this, it is also known to be a “Public Distributed ledger”. This database cannot be altered or hacked because it is visible and validated by the network users.


  • How does it work?
    As and when the transactions happen, it is being recorded in something called a “Block”. This block contains the transaction details like who is sending the crypto to whom, where, and how much they are sending. Each block has a unique code called Hash. It is created using complex cryptography algorithms, every time a block is formed. Once a block of transactions is complete, it will be linked to a new block. Thus, forming a chain of blocks on the network, which cannot be tampered with due to heavy encryption. All of this was made possible with the help of Blockchain technology.



What is Bitcoin?
Bitcoin is the most popular type of Cryptocurrency. It was launched in 2009 by a group or an individual with the pseudonym Satoshi Nakamoto. It is intangible which means it does not have a physical presence. It does not disclose the names of the sender and the receiver of the bitcoins on the ledger.

The supply of bitcoin is limited to 21 million. As of March 2021, there were over 18.6 million bitcoins in circulation with a total market cap of around $927 billion. It holds more than 60% of the total value of all the cryptocurrencies of the world. As of April 17th, 2021, 1 bitcoin is worth Rs. 46,47,378.31!

People usually use the terms Bitcoin and Blockchain interchangeably. But, that’s not the case. Bitcoin is a cryptocurrency backed by blockchain technology. Let’s move on to a little more advanced level and understand how a bitcoin transaction takes place on the network.

Assume, Mr. A wants to send 1 bitcoin to Mr. B. Every network user has 2 keys- a Public key and a Private key. Think of the public key as your UPI ID which can be public, and the private key as your PIN which you do not share with anyone. Mr. A initiates the transfer of bitcoin by entering his and Mr. B’s public key. After that, Mr. A will digitally sign and encrypt this transaction by entering his private key. This transaction is now transmitted across the Blockchain network.

This transaction will become a part of a Block that needs to be validated before it is added to the Blockchain. This block will be validated by someone called Miners on the network. They solve a complex mathematical problem to validate a block and are in turn, rewarded with a few bitcoins. This process of validating a block is called ‘Proof of Work’ and the process of adding a block to the blockchain is called ‘mining’. On average, Bitcoin validation happens in 10 mins. Once validation is complete, all Mr. B gotta do is enter his private key to decrypt the transaction and receive his bitcoin.

Cryptocurrencies have evolved as a new option for portfolio diversification. There are so many options under the crypto umbrella to choose from. Some cryptocurrencies even offer fractional investment. Before investing in cryptos, one must note that it is not regulated and is technology-dependent. Even though few cryptos have proven themselves, if things go south, one might lose all of their crypto holdings.

I hope this blog has made understanding Cryptocurrencies a little easy for you. If you want to learn more about it stay tuned to my YouTube Channel, as I will be covering the “Basics of Cryptocurrency” in a series soon. Until next time!



What is Cryptocurrency?
Bretton Woods Agreement


It said, “Everything is fair in Love and War!”, is it?

The economic devastation caused by the Great Depression in the 1930s left many countries struggling with high unemployment rates, poverty, and political instability. Many countries, including the United States, implemented protectionist trade policies in response to the Great Depression. This led to a decline in international trade and increased competition for resources, creating tension between countries. Countries had also engaged in competitive devaluations of their currencies, which destabilized the global economy and along with a few other factors contributed to the outbreak of World War II.

Towards the end of World War II, a collective need was felt to take steps to prevent a repeat of the economic chaos that had occurred during the interwar period, which had contributed to the outbreak of the war, which brings us to the Bretton Woods Agreement.

What was the Bretton Woods Agreement?

The Bretton Woods Agreement was signed in July 1944, toward the end of World War II. The agreement was negotiated by representatives of 44 Allied nations at a conference held in Bretton Woods, New Hampshire, USA. The main purpose of the agreement was to establish a new international monetary system that would help to promote economic stability and prevent a repeat of the economic chaos that had occurred during the interwar period.

It aimed to establish a system of fixed exchange rates, with the US dollar as the world's reserve currency. Under the agreement, other currencies would be tied to the US dollar at a fixed exchange rate, and central banks would be able to convert their dollars into gold at a fixed rate of $35 per ounce.

The two main parties to the agreement were the US and the UK, which were the dominant economic and military powers at the time. The US played a leading role in the negotiations and had the most influence over the final outcome of the agreement.

But why do the United States and the US Dollar have an upper hand in this agreement?

The US was a dominant economic and military power at the time. They had emerged from World War II as the world's largest economy, with a powerful military and vast reserves of gold. The US also had a vested interest in promoting international trade and investment, as it was a major exporter of goods and services.

In contrast, Europe was in a weakened state after the war, with its economies and infrastructure badly damaged. Europe also faced a number of political and social challenges, such as the need to rebuild their societies and economies, and the rise of communist movements.

Given these circumstances, the US was able to use its economic and military power to shape the terms of the Bretton Woods Agreement in its favor. The US was able to establish the US dollar as the world's reserve currency, and other countries were required to tie their currencies to the dollar at a fixed exchange rate.

What did the Bretton Woods Agreement facilitate and what was its impact?

As mentioned earlier, the Bretton Woods Agreement facilitated international trade and investment by providing a stable framework for the exchange of currencies. It provided a mechanism for countries to settle their international accounts through the International Monetary Fund (IMF). The IMF was established to provide loans to member countries facing balance of payments difficulties and to oversee the exchange rate system to ensure that countries complied with the rules of the agreement.

The agreement had a significant impact on the global economy and international trade. The fixed exchange rate system helped to promote economic stability and facilitate international trade and investment. Countries were able to rely on stable exchange rates when making international transactions, which helped to promote economic growth and reduce uncertainty. Growth was also seen in the international financial markets, as investors were able to make international transactions with greater ease and confidence. The agreement helped to promote the development of new financial products, such as international bonds and currency futures, which facilitated international investment and trade.

The Bretton Woods Agreement also helped in the reconstruction of Europe after World War II. The US provided significant financial assistance to Europe through the Marshall Plan, which helped to rebuild the economies of Western Europe and promote economic integration in the region.

And last but not the least, this agreement helped the United States to establish the US dollar as the world's reserve currency, which gave the US significant influence over the global economy. The US was able to print dollars to finance its international obligations, such as military spending and foreign aid, without having to worry about the value of the dollar being eroded by inflation.

End of the Bretton Woods Agreement -

Despite the initial success of the Bretton Woods Agreement, the system came under strain in the 1960s as the US experienced rising inflation and balance of payments deficits. The US government had been spending heavily on the Vietnam War and domestic programs, while also maintaining a fixed exchange rate system that required the country to maintain a stable supply of dollars.

As a result, the US began to print more dollars to finance its obligations, which led to inflation and a loss of confidence in the US dollar. Other countries began to demand gold in exchange for their dollars, which put pressure on the US gold reserves. Therefore, in 1971, President Richard Nixon announced that the US would no longer exchange dollars for gold, effectively ending the Bretton Woods Agreement. This event marked the end of the fixed exchange rate system and the beginning of a new era of floating exchange rates, in which currencies fluctuated in value based on market forces.

How did the end of the Bretton Woods Agreement impact the world?

The end of the Bretton Woods Agreement had a significant impact on the global economy and international trade. The floating exchange rate system led to greater volatility in currency values and made it more difficult for countries to manage their economies and conduct international transactions. It had major implications for developing countries, which were often at the mercy of market forces and vulnerable to sudden shifts in exchange rates. The IMF continued to play a significant role in managing the global economy, but its effectiveness was limited by the lack of a fixed exchange rate system.

In the years following the end of the Bretton Woods Agreement, there were many attempts to create new international monetary systems that could better manage the global economy. One such attempt was the European Monetary System (EMS), which was established in 1979 and aimed to promote monetary stability in Europe through a system of fixed exchange rates. The EMS was ultimately unsuccessful, and the system was replaced by the European Economic and Monetary Union (EMU) in 1999 which established the euro as another major reserve currency in the global economy.

Another attempt to create a new international monetary system was the Plaza Accord, which was signed by the finance ministers of the US, Japan, West Germany, France, and the UK in 1985. The accord aimed to address the issue of the US dollar's overvaluation and led to a significant depreciation of the dollar against other major currencies. It was successful in reducing the US trade deficit and promoting economic growth in other countries, but it also contributed to the growth of Japan's export-led economy and the subsequent economic bubble in the country.

Legacy of the Bretton Woods Agreement:

The legacy of the Bretton Woods Agreement is the role of the US dollar as the dominant global reserve currency. While the dollar has faced challenges in recent years from the rise of other currencies like the euro and the Chinese yuan, it remains the world's most widely held reserve currency. The use of the dollar as a reserve currency has helped to cement the US's position as the dominant global economic power, but it has also led to concerns about the stability of the global economy and the potential for financial crises.

As the global economy continues to evolve and new challenges emerge, it is important to learn from the lessons of the past and to work towards creating a more stable, sustainable, and equitable international economic system. Whether through reforming existing institutions or creating new ones, there is a need for continued efforts to promote economic development and stability for all countries around the world. Until next time…

Bretton Woods Agreement
Is USD Dying?

End of the US Dollar?

Yesterday, Donald Trump who served as the president of the United States from 2017 to 2021, said that “Dollar is crashing and will soon no longer be the world standard”. This statement sparked speculation and concern about the future of USD & global trade.

Firstly, it's important to understand what it means for a currency to be the world standard. The US dollar has held this position since the end of World War II, largely due to the strength and stability of the US economy. As the world standard, many countries use the dollar as a reserve currency, meaning they hold large amounts of dollars in their foreign exchange reserves. Additionally, most international trade and financial transactions are conducted in dollars. This gives the US a significant amount of influence over global economic affairs.

However, Trump's warning that the dollar could lose its status as the world standard is not a new concern. Many countries, have been looking for ways to reduce their dependence on the dollar and increase their own currencies' importance on the global stage. This is also called as “de-dollarisation” move. It is in part due to concerns about US economic policy (e.g. heavy money printing by US in period of COVID lockdown) and the potential for sanctions that could hurt their economies (e.g. sanctions on Russia)

We can also see the below chart, which shows the declining % of USD in global forex reserves.

India is no exception to this de-dollarisation move. RBI has given permission to banks from 18 countries to open Special Vostro Rupee Accounts (SVRA) and use Indian rupees to settle payments. Renowned economist Nouriel Roubini, also known as 'Dr. Doom' by Wall Street, in February said that the Indian rupee over time could become one of the global reserve currencies in the world. China has also been stepping up the use of the Yuan as a trade settling mechanism. Last year, Yuan-denominated trade flows between Russia and China surged. Vladimir Putin said he supports using the Chinese Yuan for trade settlements between Russia, Asia, Africa and Latin America.

But it is not just about standalone countries, the BRICS ally is also reportedly exploring the creation of a common currency for trade amongst themselves. BRICS stands for Brazil, Russia, India, China and South Africa, which is an alliance of 5 powerful emerging countries. The BRICS countries represented 31.4% of the global GDP (2020), but its members hold less than 15% of the voting power at both the World Bank and the International Monetary Fund. This move by BRICS can also help it to gain influence in global market.

A new financial arrangement, seen with potential to translate into a common BRICS currency, could be announced as soon as August 2023 at the forthcoming BRICS summit in South Africa. The plan is to initially transition to using domestic currencies in transactions, and then explore the introduction and circulation of a digital or an alternative form of currency.

The potential challenge in the success of this move is the bilateral differences between India and China due to ongoing military standoffs along the Line of Actual Control between the two Asian giants. However, Babakov, the deputy chairman of the Russian parliament, the State Duma, believes that the BRICS leader’s summit will reveal preparedness to implement this particular initiative, with work on the project ongoing.

In conclusion, the dominance of the US dollar in global finance has led to many countries exploring ways to circumvent its usage. However, only time will tell if these initiatives will be successful in the long run.

Is USD Dying?