Cryptocurrency is digital or virtual currency that is protected by cryptography, which is a branch

of information security that deals with secure communication protocols that allow only the sender
and intended recipient of a message to see the currency’s contents.

Cryptocurrency exchanges generate revenue through the fees or commissions that are charged on
customer transactions.

There are several cryptocurrencies in the market, some of which are listed in the image below.

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The cryptocurrency ecosystem comprises a few stakeholders.

Cryptocurrency companies own the blockchain infrastructure. Blockchain networks are identified
by digital signatures.

Blockchain technology can also be used to deploy contracts automatically upon completion of
pre-defined conditions. These are called smart contracts.

Decentralised finance (DeFi) is a new-age concept that facilitates peer-to-peer financial services
on public blockchains without the involvement of financial intermediaries such as banks, brokers
and financial institutions.

DeFi eliminates the banking intermediary, lowers costs and reduces the paperwork and
turnaround time.

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The features of decentralised finance are as stated below.

The downsides of decentralised finance are summed up in the image below.

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● In the blockchain network, tokens are simply representations of value, which are fungible.
While cryptocurrencies are fungible tokens, the non-fungible tokens are a different kind.

● Non-fungible tokens (NFTs) have kick-started a new era, as there are NFTs for physical,
real-world assets, which increases the liquidity of these assets.

● While digital tokens could be created earlier too, they could easily be counterfeited. But
the advent of blockchain technology ensures that the authenticity of the tokens is
maintained.

● NFTs can also be used as collateral for loans, as an underlying for transactions and so on,
which is facilitated by platforms like NFTfi.

● In 2021, 15 Indian banks decided to establish a new blockchain company. The objective
was to streamline a series of banking use cases using the blockchain technology.

● The consortium was incorporated as a private limited company – Indian Banks’ Blockchain
Infrastructure Company Private Limited, also known as IBBIC.

● IBBIC will use the Infosys Finacle Connect platform, built on the R3 Corda blockchain.

● Domestic letter of credit (LC) workflow involves the buyer, seller, issuing bank and advising
bank.

● IBBIC aims to digitalise and automate the inter-organisation trade finance process. The
IBBIC LC Platform is designed to digitalise the trade finance operating model, including the
validation of ownership, document certification and secured payments.

● The network will create a single source of truth for the participating banks and will
eliminate the inefficiencies in the existing trade processes.

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