RBI has issued revised guidelines capping investment by Regulated Entities at 20% of the corpus of an AIF scheme.

About Alternative Investment Fund (AIF)

• Any fund established or incorporated in India which is a privately pooled investment vehicle which collects funds from sophisticated investors, whether Indian or foreign, for investing it in accordance with a defined investment policy for the benefit of its investors.
• AIFs are regulated by the SEBI, as per the SEBI (Alternative Investment Funds) Regulations, 2012.

Categories of AIFs

• Category I AIF: Invest in start-ups, early-stage ventures or sectors considered socially or economically beneficial.
  • E.g. Venture Capital Funds, Angel funds, SME Funds, Infrastructure Funds
• Category II AIF: They do not use leverage or debts other than to cover their day-to-day operational expenses.
  • E.g. Private Equity Funds, Debt Funds, Real Estate Funds.
• Category III AIF: It may use leverage including through investment in listed or unlisted derivatives.
  • E.g. Hedge Funds, Private investment in public equity (PIPE).

The Indian digital payment landscape has witnessed over 65,000 crore digital transactions amounting to more than Rs. 12,000 lakh crores in the last 6 Financial years.

About DPI

• RBI has developed the DPI (published Semi-annually) to measure the extent of digital payment adoption across India.
• DPI comprises these broad parameters: Payment Enablers; Payment Infrastructure – Demand-side factors & Supply-side-factors; Payment Performance; Consumer Centricity.
• The latest RBI-DPI indicates over fourfold growth in digital payment penetration since 2018.

A study of RBI has proposed the construction of a FCI for India to track market trends with daily frequency.

About Financial Conditions Index (FCI)

• It assesses the degree of relatively tight or easy financial market conditions with reference to its historical average since 2012. 
• The chosen indicators represent five market segments: money market, G-sec market, corporate bond market, forex market, and equity market.
•  A higher positive value of the FCI indicates tighter financial conditions. 

The World Bank report titled ‘Global Findex 2025’ released  reflecting achievements in digital and financial  inclusion.

India specific Highlights

• India has account ownership at or close to 90 percent.
• 16 percent of account owners do not have an active account, the average for all other low- and middle-income economies is 4 percent.
• The share of both women and men with only inactive accounts decreased between 2021 and 2024.
• The primary barrier to mobile phone ownership is the cost of the device, and lack of reliable mobile network coverage.

GENIUS Act has been enacted in the US to establish a regulatory framework for stablecoins.

• Stablecoins are a type of cryptocurrency whose value is linked to that of another currency, commodity, or financial instrument. E.g., Tether (USDT), is pegged to the US dollar
• They have the potential to bring efficiencies to payments.

Why has the use of Stablecoins increased?

• Linked to an underlying asset: Due to this, they can maintain a steadier value, making them a more reliable medium of exchange than other volatile cryptocurrencies like bitcoins.
  • Underlying assets are backed by an identifiable issuer, unlike many unbacked crypto assets.
  • Issuers could be banks, nonbank financial entities, and large technology conglomerates.
• Regulation: Decisions for stablecoin arrangements are usually taken by a governance body.

Regulation of Cryptocurrency or Cyrpto Assets in India

• Currently, Crypto Assets are unregulated in India.
• However, Government, through the Finance Act, 2022, brought a comprehensive taxation regime for the transfer of Virtual Digital Assets (VDAs).
• It imposed a 30% tax on capital gains from VDAs. 
  • The Income Tax Act 1961 defines VDA as any information or code or number or token, generated through cryptographic means or otherwise; transferred, stored, or traded electronically. E.g. cryptocurrencies, Non-fungible token (NFT), etc.
• In 2023, VDAs were brought under the purview of the Prevention and Money-laundering Act, 2002.

• Released By: OECD and FAO. 
• Provides a comprehensive assessment of the ten-year prospects for agricultural commodities (Including fish) and their markets at national, regional, and global levels.
• Global Market Trends (2024) according to the report
  • Biofuels: Its demand is projected to grow at 0.9% annually, led by India, Brazil and Indonesia.
  • Cotton: Global use increased; India is set to overtake China as the top producer.