Q. With reference to Virtual Digital Assets (VDAs) consider the following statements:
1.The Indian government defines Virtual Digital Assets (VDAs) under Section 2(47A) of the Finance Act, 2022.
2.VDAs can provide a higher level of privacy and security compared to traditional financial systems.
3.VDAs often have higher transaction costs compared to traditional banking services.
Which of the statements given above are correct?

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: A
Notes:

Explanation –

Statement 1 and 2 are correct. The Indian government defines Virtual Digital Assets (VDAs) under Section 2(47A) of the Finance Act, 2022. VDAs can provide a higher level of privacy and security compared to traditional financial systems, e.g., cryptocurrency.

Statement 3 is incorrect. VDAs often have lower transaction costs compared to traditional banking services. For instance, cross border payments can be faster and cheaper with VDAs like Bitcoin.

Source: ForumIAS