Key Insights
New ways of making passive income continue to pop up all over the crypto market.
For users in India with lower-risk appetites, there are several ways to take advantage of the crypto market via stablecoins.
Some of these can be accessed on Binance and include savings, staking, and dual investment.
Investors must be aware of the 30% tax provisions on crypto income in India.
Remember to stay safe and implement 2FA as you trade your crypto.
The crypto world has changed rapidly so far, with new ways of earning passive income popping up on every corner.
One of the most popular ways to take advantage of this trend is by leveraging stablecoins on Binance—the world’s largest centralized exchange by trading volume.
If you're in India and want to make your money work for you, this guide is all you need to start making passive income via stablecoins on Binance.
What Are Stablecoins?
Stablecoins are like regular crypto. The only difference is that while normal crypto can fluctuate wildly at times, stablecoins are “stable”.
This means that they are often pegged to real-world assets (like the US Dollar) and therefore mirror their prices.
Take USDT, for example, the most popular kind of stablecoin. This stablecoin is pegged to the US dollar and therefore maintains a price of $1 at all times.
This means that while USDT holders will not be able to take advantage of general price upsides in the market, they are also protected when the market turns red.
Some other examples of popular stablecoins include USDC, DAI, and so on.
Here are some more interesting things about them.
Getting Started With Stablecoins On Binance
As mentioned earlier, stablecoins are the perfect combination between crypto and regular money.
They combine the benefits of crypto with the stability of fiat money; they do not fluctuate, and they are the best option for investors with low-risk appetites.
Even more importantly, they can be used in several ways on Binance, from staking or savings to liquidity farming.
To start your stablecoin journey on Binance, here are a few steps to follow:
Create a Binance account.
Head over to the official Binance page and create an account if you didn't have one before.
The Binance homepage: Source: Binance
Sign up using your email or mobile number, complete your KYC, and provide the required documents to get started.
Deposit Funds
You can deposit INR via bank transfer, or you can do so via UPI. Alternatively, you can also perform the same function using a credit or debit card
Choose a Stablecoin
Choose any of the most popular options, including USDT, USDC, DAI, FDUSD, and so on.
Some Ways Of Making Passive Income
Binance comes with some of the best plans for stablecoin holders to make passive income. Some of these include
1. Earning Interest with Binance Savings
Investors who do not wish to spend time moving their coins around can simply use the Binance Savings feature.
This feature allows investors to earn interest on their idle stablecoin.
They typically come in the flexible savings option (which offers daily interest and “withdraw anytime” privileges) or locked savings (with higher interest rates but locked funds).
How to Start:
Go to the ‘Earn’ section on the Binance homepage and select ‘Simple Earn,’ or 'Advanced Earn'.
Choose the stablecoin you want to deposit.
Decide between Flexible or Locked Savings.
The Binance earn page | Source: Binance
Enter the amount and confirm the subscription.
2. Staking Stablecoins for Higher Returns
Users can also stake stablecoins for passive income. Staking helps secure the blockchain network and typically earns rewards for stakers.
Binance offers an easy way to access this feature, and here’s how to get started:
How to Start:
Navigate to the ‘Earn’ section at the top of the screen and select the "Overview" option.
Choose a stablecoin and select a staking period (30, 60, or 90 days).
Binance has a “calculate your crypto earnings section with an easy way to invest as illustrated:
Dual Investment
Think of dual investment as a “non-principal-protected” way to make passive income.
It is an easy way to deposit a stablecoin and earn a yield based on the settlement price of another crypto.
Here’s how to Start:
Go to the main page of the Binance mobile app and click on the “more” section, just underneath your wallet balance.
Scroll down and find "dual investment" under the "earn" section.
Choose your preferred coin.
Set a target price and settlement date.
If the market meets your target, you receive the yield in the target crypto. If it doesn't, you get it in the deposited stablecoin.
Tax Implications and Safety Tips in India
Remember that in India, crypto income (including passive stablecoin income) is subject to a 30% tax on gains.
Additionally, it comes with a 1% TDS on transactions above a specified limit.
Make sure to keep records of your own or consult with a tax professional.
You should also consider safety tips like:
Enabling Two-Factor Authentication (2FA) for added security.
Using Hardware Wallets for your long-term storage needs.
Beware of Phishing Links and only access Binance via the official website/app.
Overall, earning passive income with stablecoins on Binance is a great way to grow your wealth without having to trade actively.
Whether via savings, staking, or liquidity farming, each of these methods comes with its own set of risks and benefits.
