The best Fixed Deposit option with 0 taxes! - YouTube

Now if you convert your INR into USDT

and stake it in 12.68%, then how much money you are typically saving?

A you are getting 12.68% reward plus you are saving on that 4% depreciation rate.

Hi everyone, welcome to today's video.

So I usually get it a couple of FAQs on crypto currencies.

The first is that do you think

that companies like VAULD are legitimate companies because they are giving like

12.68 fixed deposit returns on something like USDT, USDC, other stable points?

Is that a legitimate practice?

How are they able to do it?

Second key question that I get is

that there is a lot of volatility associated with any cryptocurrency.

For example, the Bitcoin or Ethereum prices fluctuates a lot.

So even if tomorrow a bunch of different countries start accepting Bitcoin as

a legal tender, hypothetically speaking, then will I be able to buy and sell stuff?

And is there a mechanism to control this price volatility of cryptocurrencies?

So that is the precise discussion that we are going to have today.

Very important video because this is new age finance.

If you learn about it, there are massive money making opportunities in it.

So I will explain this concept through the lens of stable coins.

I will tell you what stable coins is, how you can make money through stable coins.

More importantly how you can save that 30%

tax that Indian government keeps on speaking about in crypto currencies.

So how can stablecoin help you avoid that as well?

That is the complete analysis and discussion I'm going to have.

I'll explain this in super simple concept.

So please press the like button that helps

this video reach out to more people and make them more financially aware.

I will also speak about the risk profile.

It's not as if that I will just show you the good side and go away.

I will tell you the complete analysis.

Then you can make a call whether it makes

sense for you to buy something like USDT, USDC or other stable coins.

So let us get the discussion started.

Point number one, what are stable coins?

So simply put, stable coins are digital assets.

This is the broadest definition of stable coins that is there.

Now.

What type of digital assets are stable coins?

So they are crypto assets.

They exist in the crypto world.

Therefore they are called as crypto assets.

Also representative example would be something like USDT, USDC, Dai.

These are all the points that you can go

and buy and they will be categorized as stable points.

This is the related point that you need to know.

Third and finally they are utility tokens.

So what is meant by utility tokens? Very easy to understand.

They would be that utility means that they serve certain purpose or function.

What purpose or function?

We will study that in detail.

A simple way to imagine is that when you have US dollar, what can you do with it?

You can go buy a packet of uncle chips.

I don't know if uncle chips are available in the US, they most likely would be.

So you can go and buy goods and services.

You can use that USD to convert it into different currencies.

For example, Australian Dollar or INR

and a bunch of other utility and applications are there for US dollar.

So what is the utility of stable coins?

There is a range of utility there, but let me pick the three most important ones.

It will help you get an idea.

So the first key utility of stable coins

is that it is very less volatile compared to other cryptocurrencies.

Why do I say that? So let us understand that through

an example of the most popular stable coin called as USDT.

Now what essentially is USDT.

It is essentially in simple terms it's the crypto version of USD.

So essentially what happens on USDT is that the company that runs the USDT

network, it says that every time we are putting $1 of USDT on the crypto network

we are buying $1 of USD and keeping it into our bank account.

So USDT is essentially pegged to US Dollar.

So in the real world, if the US dollar goes up, the value of USDT also goes up.

Similarly, if US dollar comes down, the value of USDT also comes down.

So as a result, because US Dollar is fairly stable

currency, therefore USDT by default becomes a stable currency.

So to say, is it completely true?

I will discuss that in the risk scenario,

but hopefully this gives you an understanding that compared

to something like Bitcoin or Ethereum which are other prominent crypto

currencies, something like USDT is going to be very less volatile because it is

in turn dependent on the US dollar price movement.

But Bitcoin and Ethereum move independently.

There are months when Bitcoin gives

massive returns like 30% 40% this that some months it gives very poor returns.

So that volatility is not there in USDT. Type of your answer.

I have already explained it but it will

help me see whether you are understanding this concept.

This brings us to the second functionality of stable coins because you will say

that if USDT is stable and okay great, everything awesome.

Then why don't we just create a digital

version of USC and call it Central Bank Digital currency by the US?

Why do we need something like USDT in the first place?

Good question. And here is the answer.

So first and foremost USDT is used on a blockchain network and other stable

coins are also used on a blockchain network.

In case you don't understand what

blockchain network is, please watch some of my other videos.

In simple system or simple terms.

Blockchain network is a distributed ledger

system where no one owns that particular network.

For example, Internet can be influenced.

It's a somewhat centralized system but blockchain network.

Typically speaking at least a good blockchain networks.

They are not controlled by anyone.

So USDT first and foremost is put

on a blockchain network so it can interact with something called a smart contract.

And there are a range of utilities that can be unlocked because of this

feature of stable coins that they can be put on a blockchain network.

And this blockchain network is distributed and independent.

But a centralized digital currency is going to be highly centralized.

It is going to be controlled by the government itself.

So this independence is what makes us USDT or USDC other stable coins very

attractive for investors because they are essentially buying US Dollar in a way

and that US Dollar is somewhat free from an influence point of view.

Now this is a very big complicated point.

So I don't want to delve further into it.

Probably I'll make a separate video on CBDCs versus stable coins.

But for today, just understand a simple concept that USDT stable coins can be put

on blockchain network which gives it a range of utilities.

One of the primary problems with USDT or Tether is the audit risk because sometimes

Tether has TOLD that it will be regularly audited.

But it was not audited in the past and as

a result, it was fined roughly $41 million.

Will this problem continue?

Your guess is as good as mine,

but I just wanted to point out a genuine issue that exists.

But there is a lot of heat that it has

received and now it is revamping its auditing practices.

But yes, this is the primary risk that Tether has.

Now the third primary utility.

And the most exciting part about stable points is that it can help you save a lot

of commissions and undertake transmission at a very fast rate.

So let me give you an example to illustrate this point.

So let's say that you have Rs1000 and you

take this 1000 rupee, you buy certain number of bitcoins from it.

So let's say a fraction of a Bitcoin.

So let's assume it to be zero one.

And let's say that you purchase this

Bitcoin when it was trading at 30 lakh rupee per Bitcoin.

Now tomorrow the prices go up, it becomes 40 lakh and you get very tempted.

That okay, let me sell my Bitcoin.

So you will sell your Bitcoin, you will book some profit.

So instead of this 1000 rupee,

you have 1200 rupee INR worth of Bitcoin lying around in your world account.

So what are you going to do?

You are going to sell it.

Then you will have to come out of the exchange VAULD, right?

And then you will have to take a transfer

to your bank account, whichever bank you have interacted with.

So essentially what is happening in this game is that you're going first from your

bank to world and then word to bank in order to book that entire cycle.

This involves a lot of commissions because there are two layers of transactions

that you're doing now what you can do is at the moment this price increase from BTC

30 lakh to 40 lakh, you can simply swap this BTC into USDT.

There is a feature on World where you can

do this swapping very easily and you can put your money in USDT itself.

You can pick this USDT and do a fixed deposit at 12.

68% which will give you massive returns. Also.

And you don't have to convert your crypto

money into real money as of now You will say Akshat,

that makes me very uncomfortable because what if the BTC goes down?

Yes, BTC can go down, but USDT,

as we understood previously, USDT is a fairly stable point.

Why? Because it is pegged to US Dollar.

So unless the US Dollar is falling,

the USD that you're holding is unlikely to go down in value.

The second part related to this is the transaction cost involved.

For example, let's imagine that you have to send $1,000 to your friend in the US.

And when you use HDFC Bank Network plus JP Morgan or some American Bank,

two banks are there and they will charge insane amount of Commission.

At least they will charge three to 5% Commission.

But if you are using a stable point to transact on that,

I have personally sent $10,000 at only $1 fee or one USD fee.

So that is how low the commissions are in terms of transferring USDT.

If you're using non Ethereum based chains, that's a separate discussion altogether.

That how to use different smart chains.

But I hope that you get the idea

that the primary functionality of Stable coins is number one,

to do away with the volatility that is associated in the crypto world.

Number two, improve transaction speed and lower the Commission in terms

of taking your money from physical world to crypto world and back and forth.

So in this entire ecosystem,

Stable coins become a very important piece of the entire process.

Now let's move on to point number three, which is a very important point

which helps us understand the ecosystem of stable points that currently exist.

So first and foremost, take a look at the user adoption.

This will give you a sense as to which stable coins are being used the most.

So USD by far is the leading stablecoin as of now.

Let me help you understand the spectrum.

There are two broad categories of stable coins.

So the first category is called as collateral based stable coins.

For example, this can be Fiat based.

These might be based on US Dollar or some other Fiat currency.

For example, USDT is a Fiat based. Why Fiat base?

Because it is based on US Dollar and it is pegged to the US Dollar.

So the underlying value that USDT derives and derives from US Dollar.

So what happens here is that the USDT and USD are pegged to each other.

Begging means the company that is managing

the USDT network, what it does is or at least what it says

it does is that hey, we are going to release one USDT onto this

blockchain network only when we have $1 equivalent of reserves in our own account.

So therefore USDT is pegged to USD.

This is a very important concept to understand.

The second type of collateral that can be

there on stable coins could be the crypto based collateral.

For example, instead of having Fiat money as a collateral,

the company can say that we have like one Bitcoin in our account and therefore we

are releasing X number of stable coins onto this particular network.

Now there is a company that does that.

It is called as maker Dao.

And their coin is called as Dai.

So if you like this particular perspective and you want to buy a crypto oriented

collateralized coin, you can buy the dai coin, right?

So that is a simple thing that you can do.

The third would be commodity oriented underlying collateral.

So commodity would be that it can be

linked to oil prices, it can be linked to heat prices,

it can be linked to silver prices, gold prices, et cetera, et cetera.

And those type of stable points are also being designed.

So this is the academic part of it.

We don't need to get into it.

But what we do need to know is

that something like USDT is actually shaping up the crypto ecosystem.

And if there are one or two critical coins

that we need to study, it is USDT, USDC and maker dao.

So if you know about these three stable coins, then you're good to go.

Now, just to complete the thought process, there are also Algo based stable coins.

So Algo based stable coins means that when

it comes to USDT, there is a typical organization that is

doing the buying and selling of US dollars.

For example, they will say we are releasing one USD onto the network.

Someone from the company is going to buy the USD and keep it in the reserve.

But in Algo base there is no central party involved.

There is no central organization.

These are completely mathematically driven models.

And the inflation and deflation

of a particular currency or a particular stable coin is managed mathematically.

You don't need to understand it per se.

But I'm just telling you from a theory

perspective, now comes the most interesting part.

That okay, you have taught us the theory.

Now tell us how to make money from it.

So four ways of making money, or rather saving money.

So first and foremost is crypto lending.

So it simply means that for example, if you have BTC, you convert it into USDT.

And then you stake it on a platform like

World on USDT you are going to get something like twelve point 68% APY

on BTC, something like six and a half percent APY.

So are you better off playing this lending game on USDT versus BTC?

You make a call.

So this is the first key way in which how you can make money through USDT.

So simply go by USDT or simply go by BTC,

convert it into USDT and you can start making money through these fixed returns.

The second key way is called a crypto staking.

So crypto staking simply means that you're

locking your USDT into a certain liquidity pool for a fixed amount of time.

It is again doing fixed deposits only.

It's not as if the concept is very different.

But lending means that someone is going to borrow from that particular protocol.

For example, this is what a liquidity pool can be imagined to be.

So this is a smart contract.

Consider smart contracts to be banks.

So from a bank you can go and take a loan, right?

And you are essentially getting money from it.

So this is called a lending function.

You can become a lender to such banks.

And staking means that you're locking away

your money in that bank for a certain period of time.

So if you're locking away the money, the banks might give you higher returns also.

And this is a precise game that even organizations like VAULD also play.

So what they do is that the money that you

are paying them, they take it up, they do for the sticking or lending on it.

For example, let's say that they make 15%

return, they are passing off certain amount of return to you,

they are paying you 12%, they are getting 15% to do this lending

game and speaking game and they are making more returns and keeping the spread.

Now the obvious question would come

that accept, can I not directly go and lend like Vauld answer is no.

That is highly complicated.

That is a very dangerous game and you have

to open a staking note, do a bunch of different,

different things and it becomes a highly complicated game for retail investors.

So you should not be doing it,

at least until the point you don't understand the crypto world really well.

So these are two ways in which you can make money.

The third is the value appreciation itself.

For example, take a look at this particular chart.

You will see that INR keeps going down

in value by 4% each year in comparison to USD.

Now if you convert your INR into USDT and stake it in twelve point 68% then how

much money you are typically saving a you are getting twelve point 68% reward plus

you are saving on that 4% depreciation rate.

So this becomes like an excellent deal from that particular perspective.

Now you might say Akshay, I can do the same.

Almost forget about I don't need like that.

Twelve point 68%.

It's not super interesting to me, but at least in order to save my INR

from falling by 4% a year, whatever INR I have, I will convert that into US dollar.

You can't do that because no one is going

to give you a large quantity of US dollars sitting in India.

So you can't play that game also in the physical world as of now.

So your only option is to exchange your INR into not USD USDT.

So that's a simple game that you need to understand.

Fourth and final point is the saving of taxes.

Now this is a complex issue.

I'll try to explain it in a very simple format.

So what happens is this.

For example, you have centralized exchange or semicondralized exchange.

For example, when you take a look at World

or any other platform, they are semicondalized.

What do I mean by semicondrize?

For example, when you would have opened your World account or any other crypto

exchanges account, you would have had to do AYC know your

customer would have to upload your Azhar card and all that stuff.

So government has access to the books.

So to say or vault with me, everyone.

Now let me tell you something very interesting.

For example,

there are completely decentralized protocols like Uniswap, right?

Uniswap or MetaMask.

These are not centralized exchanges.

For example, just type MetaMask on your

Google browser and download it and check if they are asking you for your KYC.

The answer is no, they're not asking you for your KYC.

Now you can start using these decentralized platforms and not pay

that 30% tax that the government is trying to get from you.

Now you might say that okay, except this looks like some mumbujumbo.

I'm not able to follow it alone.

I know that this is a slightly more complicated concept,

but I'm telling it to you in a very simple, easy to understand way

that there are some decentralized exchanges where you can use and buy

cryptocurrencies in a way that the government cannot track it.

Therefore it is called a decentralized exchanges.

It's a computer program.

Government cannot say that a computer

program compute all the stuff that acceptance is buying and give us

a ledger as to how much tax he needs to pay.

You can't do that on a decentralized exchange.

So this entire 30% taxation game is not applicable.

Now I might make a complete tutorial on how to save this 30% crypto tax.

Many times people tag me and the income

tax Department also on Twitter threads, which becomes like a nightmare for me.

So therefore I'm refraining from stepping onto all these things.

But if there is enough support I will

create a specific tutorial and tell you how to do this.

But for other folks, please just figure out whatever I have told you.

Do more Googling and you will be able to see how you can save 30% tax there.

So in summary, stable coins are a very useful instrument.

They allow you to lower the volatility in the crypto domain.

They are pegged to something like a Fiat

currency or a cryptocurrency and that gives them value and strength.

They improve the ease of operation,

ease of transaction, and lead to a host of benefits.

The immediate benefit being that you can do a twelve point 68% FD plus save

yourself from that 4% appreciation that INR is currently going through.

I hope you enjoyed the video.

Please share it with your friends and I will see you tomorrow.

Bye.