Apart from unexpectedly good returns, cryptocurrency markets also have many complimentary expenses. One of these significant expenses is a wallet, where you store all your cryptocurrencies in one place. There are two types of wallets; one is hot, and another is cold. Crypto traders generally use hot wallets because they work on software, and investors prefer cold wallets because they are offline wallets that store crypto on a hard drive. Private players provide services; in return, they charge fees.
Indian cryptocurrency bill seemed to be on its way to solving this problem. The proposed legislation states that investors have to store their cryptocurrencies in Indian exchanges instead of foreign exchange or private wallets in India.
The Indian government was never in favour to legalise cryptocurrency as a medium of exchange. Instead, the government will regulate it as an investment commodity. Likewise, we store our securities invested in the stock market with the respective stock exchange; investors have to hold their cryptocurrencies with Indian exchanges.
Like Demat account for securities, the government is looking for uniform store wallets to keep an eye on the inflow and outflow of cryptocurrencies.
Like El Salvador, a National uniform crypto wallet launched earlier this year called El Chivo. India is also planning to launch a National crypt wallet; however, India will launch the wallet that will help the adoption of cryptocurrency as legal tender. The uniform wallet enables the government to restrict investors from transferring their funds to external wallets.
The unform national crypto wallet will help the government achieve their regulatory objectives, and investors can also save expenses on wallets fees. Private players are emerging in a bunch to provide service in return for a payment, which reduces their overall return on investment and gives rise to fraudulent players in the market. A single wallet will save investors from the risk of fraud and save their time choosing the correct wallet for them.
The system provides security to the investors and a watchdog to the government.