International Journal of Humanities Social Science and Management (IJHSSM)

Volume 3, Issue 2, Mar.-Apr. 2023, pp: 816-821www.ijhssm.org

A Study on Cryptocurrency in India

Mrs. Saritha S R, assistant professor JU-CMS,
Mr. Baskar Apollos, assistant professor, JU-CMS,
Himika Sawaria, 2nd year BBA Graduate, JU-CMS,
Icchita Jaiswal, 2nd year BBA Graduate, JU-CMS,
Hamsalekha Shankar, 2nd year BBA Graduate, JU-CMS,
Gowri R Nair, 2nd year BBA Graduate, JU-CMS,
Harika Nagareddy, 2nd year BBA Graduate, JU-CMS.

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Date of Submission: 02-04-2023 Date of Acceptance: 12-04-2023
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Abstract new types of deals, transactions and currencies are

With the rapid development of information and born. One notable form of finance that has emerged
communication technology, many of our daily life in the last few years is digital currency. Digital
activities have been integrated online, making it currency (CC) can be defined as a medium of
more flexible and effective. The massive increase in exchange that can be used in many financial
the number of online users has revived the concept transactions, whether virtual or real, separate from
of virtual words and created a new business real world money. Cryptocurrencies represent
phenomenon: cryptocurrencies that facilitate valuable and intangible objects that can be used
financial activities such as buying, selling, and electronically or virtually in various programs and
trading. Digital currencies represent valuable and networks such as online social networks, online
intangible objects that are used electronically in social games, virtual worlds and peer-to-peer
various programs and networks such as online social networks.
networks, online social games, virtual worlds, and Cryptocurrency is a digital or virtual
peer-to-peer networks. In recent years, the use of currency that works like a token and is intended to
virtual currency has expanded in various systems. be a global trading method that can keep its value.
This article explores user expectations for the future They are also protected by encryption, which makes
of digital currencies. It also examines the confidence it mentally difficult to duplicate and fake.
of users in dealing with cryptocurrencies when the Cryptography offers very strong protection
use of such digital currencies is not fully controlled for cryptocurrency, which can be thought of as a
and regulated. Its purpose is to measure the digital or virtual currency. It is impossible to engage
prevalence of the use of digital currencies, to in double-spending or counterfeiting cryptocurrency.
understand. This article also analyzes how 21 A cryptocurrency operates on a decentralized
different countries have reacted to cryptocurrencies network and is based on the Blockchain idea. The
in terms of regulations and laws to get a clear trading ofBitcoin occurs between willing people
picture of the impact of various laws in India to without any third parties beingbrokers or regulatory
regulate cryptocurrencies. organizations involved.
Keywords:Bitcoin, Cryptocurrency, Government,
Cryptocurrency Legislations, Opinion of Background of the Study
Government. The Indian government has said that it
would impose a 30% tax (the highest tax rate in
I. Introduction India) on income derived from cryptocurrency in the
There is no doubt that the age of Union Budget 2022–2023 document. Varied
information and communication technology has professionals, academics, and major financial
created many golden opportunities in different institutions have different perspectives on this. They
aspects. One of the areas that benefit from these assert that either the Indian cryptocurrency market
technologies and online connectivity is the financial would come to an end or that the Reserve Bank of
and business sector. An increasing number of online India would introduce coins. In light of this, we
users are reviving the concept of the virtual world hope that this page will serve as a resource for
and creating a new business phenomenon. Thus,

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 International Journal of Humanities Social Science and Management (IJHSSM)
Volume 3, Issue 2, Mar.-Apr. 2023, pp: 816-821www.ijhssm.org

future research and discussion on the history and to stop using it. India is one of the countries that has
prospects of cryptocurrencies in India. banned the use and extraction of Bitcoins. However,
according to a Supreme Court decision, Bitcoin
Need for the Study trading is no longer banned in India from now on.
 This research helps us to gain knowledge about That is why it is important to understand Bitcoin
cryptocurrencies and their impact trading in India, which includes how it works, how
Understand various topics like - it originated in India, and the parties involved in this
Can India gain positive financial leverage from transaction
using Bitcoin?
Should India Say Yes to Bitcoin? Research Gap
 The production of this study is to enable us to Research gap is a question or problem that
better understand the following: has not been answered by any existing research or
 Bitcoin, Lakshmi coin, digital currencies. research within your field. Sometimes, a research
 Study provides an opportunity to develop and gap occurs where there is a new idea or idea that has
expose analytical and technical skills not been studied at all. Sometimes we find a
Towards digital currency revolution. research gap when all existing research is out of date
 Provide an overview of the Indian cryptocurrency and needs new / updated research (online studies in
market. 2001, for example). Or, perhaps a certain number of
The trending words used by the media, younger people did not read well (perhaps there are many
generations, investors and IT workers lessons about teens and video games, but there are
Bitcoin and Cryptocurrency. Is it time for India to not enough lessons for toddlers and video games, for
go cashless? - In this case! Using Bitcoin example).
What are the positive steps that will enable India to There are many ways in which
achieve this great dream? cryptocurrency trading is commonplace, but there
are many differences, too. This is why it is possible
Problem Statement to use common definitions, but they need to be
 This research is relevant to achieve a deeper properly adjusted and linked according to the
understanding of the impact of digital currencies on specifications of cryptocurrencies.
investor decision making. The price gap, for example, is a recurring
Production and economy theme in traditional markets, and we can already see
it becoming a factor to consider when it comes to
 Playing a key role in today's financial investment, Bitcoin price analysis.
helping to increase digital capital, The gap is the area of the chart where the asset price
It affects economic growth. rises or falls from the close of the previous day
 Meet the current needs of the digital age and without any trade taking place in the middle.
influence investor decisions. Most people who know about Bitcoin can rightly
 Analysis of strengths and weaknesses of digital think that this will not happen with a very large
currencies in India. cryptocurrency with a market cap. After all, the
 Analyze the current position of digital currencies crypto market does not stop trading on Friday - it is
and their investors. a 24/7 endless show.
 Provide information on post-implementation
economic conditions Research Objectives
Digital currency. Learn how cryptocurrencies are impacting the
 Study the changes that digital currencies have Indian economy
brought to investors and the economy.  Research the current status and future prospects
of digital currencies in India
II. Review of literature  Understand the importance of digital currencies
With the invention of innovation and the according to the perceptions of investors.
use of digital currency, the world has been  Analyze investors' perceptions of digital
developing into a society with no money. One of the currencies.
most significant innovations in money is a  Examining the factors that investors consider and
cryptocurrency, which is a digital currency that can the factors that ultimately affect them.
be controlled by any central authority or bank and is investment.
universal. However, there are some problems with  To predict the future outlook of the digital
this new currency, which has caused many countries currency investment market.
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 International Journal of Humanities Social Science and Management (IJHSSM)
Volume 3, Issue 2, Mar.-Apr. 2023, pp: 816-821www.ijhssm.org

 Check the current profitability of different just construct powerful comforters to acquire
cryptocurrencies. analyze Bitcoins. Mining is the term used for this.
The power to earn money and income of digital However, it's getting harder and harder to stop the
currencies. generation of too many Bitcoins. If you start mining
Hypothesis now, it might be years before you ever get a single
Hypothesis 1- Bitcoin. The electricity costs for your computer may
There is a positive impact of cryptocurrency on the end up costing more than the value of one bitcoin.
Indian economy.
Cryptocurrency has a negative impact on the Indian Why are Bitcoins worth so much money?
economy. Two examples of non-monetary objects that humans
Hypothesis 2 value include gold and diamonds. The Aztec people
Cryptocurrencies have had a significant impact on used cocoa beans as money. Bitcoins are valued
investors' investment decisions. because people are ready to exchange them for
Cryptocurrencies have the least impact on investors' actual goods and services as well as money.
investment decisions
Why is there such a surge in interest in bitcoins?
Data Collection Method Because Bitcoin is unregulated by the government
In this study, we chose a method of analytical or banks, some people favor it. Additionally, Bitcoin
research. can be used in a largely anonymous fallen thought
We used secondary data from that every transaction is recorded, until you let
- financial websites, someone know which "account number" belonged to
- The website of the Government of India, you, they wouldn't know.
- journals, Is it safe to use?
- newspapers, It is exceedingly difficult to copy Bitcoins, generate
- books, and magazines, among other counterfeit ones, or spend ones you don't own
sources, to meet research objectives. because every transaction is visible to everyone.
Your bitcoins could be permanently lost if you lose
Data Analysis and Findings your wallet or accidentally delete them. There have
How Does Bitcoin Work and What Is It? also been thefts from websites that let you keep your
Each Bitcoin is essentially a computer file that is Bitcoins remotely. Because of the volatility in the
kept in a "digital wallet” on a computer or value of Bitcoins since its launch in 2009, some
smartphone. individuals think it is hazardous to exchange actual
You can receive Bitcoins (or portions of them) in money for them.
your digital wallet, and you can also send Bitcoins
to other people. Journey of Cryptocurrency in India to date
In the public ledger known as the blockchain, every • Between 2013 and 2017: The years 2013 and
single transaction is documented. 2017 can be viewed as the beginning of the
People may trace the history of Bitcoins in this way, cryptocurrency trend in India. During this time,
which makes it impossible for them to spend money there were a lot of questions, misunderstandings,
they don't have, clone transactions, or reverse them. and confusion regarding the emergence of
cryptocurrencies in India. The public was
How are Bitcoins obtained by people? forewarned about cryptocurrency by RBI in 2013.
There are three fundamental ways to get bitcoins. The term "public" in this context refers to buyers,
- Real money can be used to buy bitcoins. sellers, traders, and other organizations. The RBI
-You can take Bitcoin as payment while selling has also stated that it is closely monitoring all events
goods. relating to cryptocurrencies, particularly those
-A computer can also be used to create them. involving Bitcoin (a very prominent cryptocurrency)
and other cryptocurrencies (Altcoins, which are an
What steps are involved in producing new Bitcoin alternative digital currency to Bitcoin). The Reserve
For the Bitcoin system to function, users can force Bank of India (RBI) issued a stern warning to the
their computers to process transactions for everyone. public that "virtual currencies/cryptocurrencies are
The devices are made to handle incredibly difficult not legal money in India" in February 2017 and
mathematical problems. They occasionally receive a again in the third quarter of the same year.The
Bitcoin as payment, which the owner keeps. People government of India has established a committee to
examine various cryptocurrency-related concerns
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 International Journal of Humanities Social Science and Management (IJHSSM)
Volume 3, Issue 2, Mar.-Apr. 2023, pp: 816-821www.ijhssm.org

and inform about the necessary future actions as a recommendations for future measures. Nirmala
result of some PILs (Public Interest Litigations) Sitharaman, the finance minister, made all of this
filed in court in response to the RBI's warning. official in the Rajya Sabha on February 20, 2021.
As a result, there was no restriction on virtual The government is abutment about introducing a bill
currencies during this time. on cryptocurrencies, according to Anurag Thakur,
minister of state for finance announcedncement in
• 2018: It's crucial to note that the Indian Finance the legislature. The government intends to advance
Ministry-appointed committee developed a bill on research and innovation in fields related to
cryptocurrencies in April 2018 but "was not in favor cryptocurrencies, according to Nirmala Sitharaman,
of a ban." minister of finance.
The Blockchain and Crypto Assets Council (BACC)
• 2019: (bill to outlaw cryptocurrencies): Following and various representatives of Indian cryptocurrency
are some key points: In India, engaging in exchanges met with the standing committee on
cryptocurrency trading, mining, holding, or use can finance in November 2021, and anconcludedclusion
result in a monetary fine or a 10-year prison that it would be unfair to outright ban
sentence. cryptocurrencies in India; instead, they should be
With effect from the publication date of this act, any regulated. Following that, the governor of the
holder, user, or person shall declare or dispose of all Reserve Bank of India, Shaktikanta Das, talked
cryptocurrencies in their possession for 90 days about how the unregulated nature of
period. cryptocurrencies poses a risk to the financial system
Cryptocurrency methods and technologies can be and how eager the RBI is to introduce its own
used for research, development, teaching, and digital currency (as legal cash, of course). The
academic endeavors. government has not taken any action to ban
The RBI may eventually introduce the digital rupee cryptocurrency ads in India, according to finance
as legal money in India. minister Nirmala Sitharaman, who said in the Rajya
In the benefit of the public, the Indian government Sabha that it will instead raise awareness of
may waive certain trading restrictions (if necessary). cryptocurrencies through the RBI and SEBI
(Securities and Exchange Board of India).
• 2020 (an RBI setback): The RBI suffered a setback
in March 2020 when the Indian Supreme Court Limitations of Research
overturned the RBI's ban on cryptocurrency. No form of digital currency is free from
some economic and security concerns. In order to
Judgment: In a 180-page decision, a panel of investigate the challenges and problems that exist in
judges led by Justices Rohinton Nariman, Aniruddha such virtual phenomena, we analyzed several studies
Bose, and V. Rama Subramanian found that: (1) The and digital currency platforms. We also saw several
Reserve Bank of India has not yet mentioned any digital currency sales forums. Key issues and
point regarding regulations of virtual currencies by implications of digital currencies include:
nationalized banks, commercial banks, other Security Threats: Hackers and malicious
financial institutions, etc.; and (2) The exchange of users can create whatever they want from digital
virtual currencies has not yet resulted in any currencies if they know how to break into the
negative effects, directly or indirectly, wholly or system and create it. This allows you to create fake
partially. cryptocurrencies or steal cryptocurrencies just by
The bench's chief justice, Justice Rama changing your account balance. For example, selling
Subramanian, deemed the RBI position to be virtual items or in-game currency violates World of
extremely "disproportionate." The Supreme Court Warcraft (WoW) game policies. Therefore, many
has also pointed out the failure of the Indian users go to WoW gold selling websites and buy
government to establish a legitimate digital rupee, virtual gold to pay for their virtual expenses. Many
despite numerous bills and committee WoW gold selling websites are unreliable and
recommendations. vulnerable to hacking, and many users complain of
paying real money for free or fake virtual currency.
• 2021: A high-level Inter-Ministerial Committee Fluctuations in the value of digital
(IMC) was established, with the secretary of currencies: A study by Chow and Guo observed that
economic affairs serving as the committee's the value of digital currencies decreases when the
chairman. The committee's mandate is to investigate popularity of virtual communities decreases. For
various cryptocurrency-related issues and make example, a user with 1000 units of virtual currency
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 International Journal of Humanities Social Science and Management (IJHSSM)
Volume 3, Issue 2, Mar.-Apr. 2023, pp: 816-821www.ijhssm.org

can buy 100 different products. If the virtual trade of those assets as a legal business. Clarity on
currency provider goes down, users can only buy the tax slab removes uncertainty and could grow the
from 10 items in increments of 1000. This is industry.
because the decline is reflected in fewer goods and • Unfavorable for investors: Given how volatile
services, especially in closed virtual communities. cryptocurrencies carry-forward forward losses will
Money Laundering: Money laundering is be a setback for investors. This worry will always
one of the most likely increased risks of using VCs, prevent investors from dealing with
especially on platforms that allow users to exchange cryptocurrencies, especially retail investors. The
virtual currency for real money. In a real-life case in high tax rate will reduce investors' net profits, and
South Korea in 2008, police arrested a group of 14 beginning on April 1, 2023, the 115BBH provisions
people for laundering $38 million from the sale of on income from virtual currencies will go into
digital currencies. The group transferred $38 million effect.
in gold farming proceeds from South Korea to • Problem: Because income tax in India is based on
Chinese paper companies as payment for their assets rather than the way those assets were
purchases. acquired, taxing cryptocurrencies does not fully and
Unknown Identity Risks: Account creation publicly declare them to be legal. • Future: It is
on most cryptocurrency platforms, such as social highly improbable that the Indian government will
games and social networks, is not authenticated, so submit a new statute to make cryptocurrencies
financial transactions cannot be adequately illegal based on historical precedent and recent tax
monitored. Gamers and users can create multiple disclosures.
anonymous accounts and use them for illegal
transactions. There is no way to know the source of Further Scope of Research
the creation or payment of virtual currency. This The discussion above indicates that
makes the transaction untraceable if money although the history of cryptocurrencies in India has
laundering is suspected. Additionally, the lack of not been very long, there have been many ups and
identity allows criminals to pay for their crimes with downs throughout this brief period. The two most
digital currencies. important problems are the Supreme Court ruling in
The black market of digital currencies: The 2020 and the measure prohibiting cryptocurrencies
financial situation of some social games such as in 2019.
Second Life and World of Warcraft is mature Cryptocurrencies have a lot of promise, and
enough to create a black market for buying and Indians have lately resumed talking about them
selling digital currencies. Due to the increasing following the presentation of the union budget for
popularity of virtual currencies in the online 2022–23 on February 1st. It will be quite fascinating
environment, the black market of trading virtual to see how investors in India respond to
currencies for real money is booming. Looking at cryptocurrencies after the application of 30% taxes.
several social gaming forums, several cases of The debut and features of the future digital
scams were raised and discussed among users. money issued by the RBI will be crucial. Investors
have begun to claim that India is copying China by
Impact of the Union budget 2022-23 on giving the RBI exclusive jurisdiction to establish
Cryptocurrencies in India: and promote digital currencies as of the union
The transfer of any virtual currency or budget 2022–2023. It will be quite intriguing to see
cryptocurrency asset will be entitled to a 30% tax the nature and regulations of cryptocurrencies if the
deduction, the Indian government has stated plainly Indian government introduces a new bill on the
in the union budget for 2022–2023. subject. Aside from all the facts and forecasts, one
No loss incurred in the transaction may be carried thing is certain: Blockchain technology and
forward. cryptocurrencies will be hot topics in the coming
Virtual goods and cryptocurrencies used as gifts will years.
be taxed in the recipient's hands. Until the government takes firm action on
By 2023, RBI plans to launch a Central Bank the working and regularisation of cryptocurrency the
Digital Currency (CBDC) on blockchain research can be further expanded based on the
technology. various changes that will be brought in by the
1% of all payments made for the transfer of digital Government.
assets will be taxed at the source.
• Impact: The Indian government may now officially III. Conclusion
recognize cryptocurrencies as legal assets and the
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 International Journal of Humanities Social Science and Management (IJHSSM)
Volume 3, Issue 2, Mar.-Apr. 2023, pp: 816-821www.ijhssm.org

The Indian government should take a stand in the [14]. https://www.jetir.org/view?paper=JETIRZ00

world of cryptocurrencies as it has huge potential to 6066
bring [15]. https://gscen.shikshamandal.org/wp-
Technological revolution in the country. Taxes on content/uploads/2022/sp/BBA20-21/14.pdf
cryptocurrency gains also add up to huge sums of
direct
The tax that goes to the I-T sector can drive the
overall growth of the economy. Indian
The government should be keen to regulate rather
than announce a blanket ban. need to be made
It is transparent, safe and more reliable. Citizens
should be more aware about the overall functioning
of
Cryptocurrency to invest more on it, especially in
India which is the second largest in terms of
population.
Cryptocurrencies have a bright future that
encourages e-investment, e-business and should
have laws.
Regarding cryptocurrencies, many legal, financial
aspects are made towards more customer friendly
and secure system

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