PROJECT REPORT

(Submitted for the Degree of B.com Honours in Accounting and Finance

under the University of Calcutta)

TITLE OF THE PROJECT

AN ANALYSIS OF CRYPTOCURRENCY IN THE INDIAN ECONOMY

Supervised by
Name of the Professor: Prof. Divyani Datta
Month & Year of Submission: April 2023

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 PROJECT COMPLETION AND PLAGIARISM VERIFICATION
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Student Name: Medhavi Rustagi

Room No.: 12 Roll No.: 1367

Title of the dissertation: Analysis of Cryptocurrency in the Indian Economy

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Name of the Supervisor: Divyani Datta

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Date: 11th April 2023

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Medhavi Rustagi_1367_1st Draft_Project 2023.docx
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 STUDENT DECLARATION

I hereby declare that the dissertation/project with the title ANALYSIS OF

CRYPTOCURRENCY IN THE INDIAN ECONOMY submitted by me for the partial
fulfilment of the degree of B.Com. (Honours)at St. Xavier’s College (Autonomous), Kolkata is
my original work and has not been submitted earlier to any other Institution for the fulfilment
of the requirement for any course of study.

I also declare that no chapter of this manuscript in whole or in part has beenincorporated in
this dissertation/project from any earlier work done by others or by me. However, extracts of
any literature which has been used for this dissertation/project have been duly acknowledged
providing details of such literature in the references.

Signature:

Name: Medhavi Rustagi

Date: 11th April 2023
Address: Greenwood Elements Newtown

Room: 12

Place: Kolkata Roll No.: 1367

 TABLE OF CONTENTS

SL. NO. TOPIC PAGE NO.

1. Chapter 1- Introduction
1.1 Background 5

1.2 Rationale 5
6
1.3 Literature Review
8
1.4 Research Gap
9
1.5 Research Objective
9
1.6 Research Methodology
10
1.7 Limitations
2. Chapter 2- Conceptual Framework
2.1 What is Cryptocurrency? 11

2.2 Most common Cryptocurrencies 12

2.3 Potential benefits of Cryptocurrencies 12
2.4 Risks of Cryptocurrencies 13
2.5 Evolution of Cryptocurrencies 13

2.6 Cryptocurrency: Is legal Tender in India? 14

2.7 Central Bank Digital Currency – India 14

15
2.8 Blockchain and Financial Sector
15
2.9 Related laws and Regulations

3. Chapter 3- Analysis of Data

16
3.1 Objective 1 - Analysis
17
3.2 Objective 2 – Analysis
24
3.3 Objective 3 – Analysis 28
3.4 Objective 4 - Analysis
4. Chapter 4- Conclusion and Recommendations
30
4.1 Future Areas of Research
30
4.2 Policy Recommendations
31
4.3 Conclusion

5. Chapter 5- References 32
6. Questionnaire 33
 CHAPTER 1 – INTRODUCTION

18.1 BACKGROUND
Cryptocurrencies are decentralized digital currencies that use cryptography and
Blockchain technology to record transactions and issue new units. Cryptocurrencies
like Bitcoin and Ethereum have emerged as a new asset class and a potential
replacement for mainstream financial assets. Although the Indian government has not
yet accepted cryptocurrencies as legal tender, they have grown in popularity. The
purpose of this research is to look into the public perception, legal status, investing
behaviour, hazards, and future possibilities of cryptocurrencies in the Indian economy.
A survey questionnaire is also used in the study to collect data on public knowledge,
investment behaviour, and the hazards associated with cryptocurrencies.

KEYWORDS – Bitcoin, Blockchain, Cyber Security, Cryptocurrency, SWOT Analysis

18.2 RATIONALE
Cryptocurrencies have gained significant attention in the past few years due to their
decentralized nature and potential to disrupt traditional financial systems. However,
the use and adoption of cryptocurrencies in India remains a topic of debate and
scrutiny.
Therefore, an analysis of cryptocurrency in the Indian economy is important to
understand its impact on various economic factors such as financial inclusion,
monetary policy, taxation, and regulation. Additionally, India's large population and
emerging economy make it an interesting case study for exploring the potential
benefits and challenges of cryptocurrency adoption in developing countries. The
research can provide valuable insights into the current state of cryptocurrency adoption
in India, the factors influencing its adoption, and the potential implications for the
Indian economy. This can inform policymakers, investors, and the general public on
the advantages and limitations of cryptocurrencies and aid in the development of
appropriate regulatory frameworks for their use.
 18.3 LITERATURE REVIEW
18.3.1 Rajan, A., Kaur, H., Singh, A. K., Sisodia, D. R., & Garg, A. K. (2022): This
article examines the growth of cryptocurrencies, their pros and cons, and
regulatory obstacles. It covers various types of cryptocurrencies, their
popularity, and the potential impact on traditional banking.
18.3.2 Sharma, K. (2022): The article provides an ethical analysis of cryptocurrencies
in India, discussing their benefits and challenges and the ethical issues they
raise. It presents arguments in favor of and against cryptocurrencies,
highlighting their potential benefits and risks.
18.3.3 Sharma, R., & Gautam, S. (2022): The authors explored the potential of
Cryptocurrency as a new investment avenue in India, exploring its advantages
and disadvantages, regulatory landscape, and risks. They highlighted its
potential as an alternative investment vehicle but warned of caution and
awareness among investors.
18.3.4 Shikha, & Bhargava, R. (2022): This article discusses the evolution of
Cryptocurrency and the need for regulation in the current digital landscape.
The authors highlight the risks associated with unregulated digital currencies,
such as cyber security risk and money laundering.
18.3.5 Wisetsri, W., Vijai, C., Kasidit, C., & Jirayus, P. (2022): The article provides
an overview of cryptocurrencies, including their evolution, concept, and
potential applications. It discusses the advantages and disadvantages of
cryptocurrencies, as well as the challenges they face in terms of regulation,
security, and market fluctuations.
18.3.6 Bala, A. (2021): The article discusses the potential impact of Cryptocurrency
on India's economy and financial system, with the author emphasizing its
potential to improve financial inclusion and reduce transaction costs. However,
there is a need for caution due to the uncertainty surrounding its future.
18.3.7 Bholane, D. K. P. (2021): The article provides an overview of the benefits and
challenges associated with cryptocurrencies. It highlights their advantages,
such as faster and cheaper transactions, but also their risks, such as association
with illicit activities and impact on financial stability.
18.3.8 Gowda, I. P. M. (2021): This article provides a comprehensive review of the
regulatory landscape of cryptocurrencies in India. It examines the current legal
 status and challenges faced by cryptocurrencies, as well as the government's
stance towards them.
18.3.9 Mubarak, D., & Manjunath, H. (2021): The study explored the status of
Cryptocurrency in India, providing insights into its history, advantages, and
disadvantages. It identified potential benefits such as improved financial
inclusion and reduced transaction costs, but also noted the associated risks.
18.3.10Parab, L. J., & Nitnaware, P. P. (2021): Parab and Nitnaware's (2021) study
compared Cryptocurrency investment with traditional options and found that it
had emerged as a viable and less volatile investment option with higher returns.
This paper describes the increasing popularity and adoption of Cryptocurrency
among Indian investors, particularly young investors.
18.3.11Shetty, S. K., & Cristi, O. (2021): An online survey of Indian youths' attitudes
towards Cryptocurrency investment revealed that the majority of respondents
had a positive attitude towards it and believed it would bring high returns. The
perceived risk associated with Cryptocurrency investment was a significant
factor in influencing their attitudes towards it, consistent with previous
research on youth attitudes.
18.3.12Irfan, S. B., & Malavika, M. (2020): The article examines the opportunities
and challenges of cryptocurrencies in India, including regulatory uncertainty
and the Reserve Bank of India's cautious approach towards them. It also looks
at potential benefits such as financial inclusion and cost reduction, as well as
risks such as illicit activities and impact on financial stability.
18.3.13Jani, S. (2020): This article discusses the challenges faced by Cryptocurrency
growth in India due to a lack of clear regulation and legal framework. The
author argues that robust regulation is necessary to ensure secure and effective
use of Cryptocurrency, prevent fraud and illegal activities, while balancing
innovation.
18.3.14Anil Kumar, V. V., & Swathy, P. (2019): This article examines the potential of
Cryptocurrency in India with a special focus on Bitcoin, covering the legal
framework, benefits, and risks associated with it. It highlights the potential to
revolutionize the Indian financial system, but also the challenges such as lack
of clear regulations and the potential for fraud and illicit activities.
18.3.15Devi, M. S. (2019): This article provides an overview of Bitcoin and
Blockchain technology, evolution, unique features, and potential applications
in different
 sectors. The author also discusses the advantages and challenges of using
Bitcoin and Blockchain, as well as their potential to disrupt traditional financial
systems.
18.3.16Dorbala, R. (2019): This article examines the regulatory status of
cryptocurrencies in India, highlighting the challenges they face such as the lack
of legal clarity and regulatory uncertainty. The author discusses the legal and
regulatory challenges and their impact on the adoption and growth of
cryptocurrencies in India.
18.3.17Vishwakarma, P., Khan, Z., & Jain, T. (2019): This article examines the
growth of Cryptocurrency in India, its legal framework, and regulatory
challenges such as taxation and money laundering. It argues that lack of clear
legal framework is a major obstacle to adoption and calls for a comprehensive
regulatory framework.
18.3.18Govindasamy, R. (2018): This article provides an overview of Cryptocurrency,
its types, technology, and potential implications in various industries. The
author also discusses the potential of Blockchain technology to transform
industries like banking and real estate sector.
18.3.19Purohit, H. (2018): This article provides an overview of the current and future
prospects of cryptocurrencies in India, with a focus on Bitcoin, covering the
legal status of cryptocurrencies, potential benefits and challenges, and related
initiatives. It also discusses India's first Cryptocurrency exchange and investor
interest in cryptocurrencies, opportunities and challenges for cryptocurrencies.

18.4RESEARCH GAP
18.4.1 Regulatory framework: The regulatory framework in India is a major
research gap in understanding the legal status of cryptocurrencies, as there is
no clear regulation on their use, trading, and ownership.
18.4.2 Adoption and usage: Adoption and usage are low compared to other
countries, and research on the factors that influence the adoption and usage of
Cryptocurrency in India can help understand the potential for growth.
18.4.3 Cryptocurrency market structure: Cryptocurrency market structure is still in
its early stages, with lack of established exchanges, liquidity, and trading
platforms making it difficult for investors and traders to participate.
 18.4.4 Cryptocurrency and financial inclusion: Research on the role of
Cryptocurrency in promoting financial inclusion can provide insights into the
potential impact of Cryptocurrency on the financial system and the economy in
India.

18.5RESEARCH OBJECTIVES
 To analyse the legal status of Cryptocurrency as digital currency in India.
 To examine the awareness of public of India regarding Cryptocurrency.
 To undertake a comparative analysis of the risks of investment in
Cryptocurrency and conventional investments.
 To understand the future prospects of Cryptocurrency by using a SWOT
analysis.

18.6RESEARCH METHODOLOGY
 Research methodology is defined as a logical and systematic plan to solve a
research problem. It encompasses the entire process of data collection and
analysis. This research aims to determine the emerging concept of
Cryptocurrency and Blockchain technology.
 An investigation of the risks involved in Cryptocurrency and conventional
investment options will be undertaken as a comparative study. A SWOT
analysis is a framework for analysing the Strengths, Weaknesses, Opportunities
and Threats of a particular topic. This paper will analyse the prospects of
Cryptocurrency in India through a SWOT Analysis.
 In this study, exploratory research will be undertaken, to investigate research
questions that have not been previously studied. Here, both primary and
secondary methods of data collection will be used. For the collection of
primary and quantitative data, a questionnaire containing closed-ended
questions will be rolled out to the target respondents. Qualitative and secondary
data will be obtained through online research and literature review on similar
areas of study.
18.7LIMITATIONS
 To obtain a representative sample for a survey on cryptocurrency can be
challenging because awareness of cryptocurrency is not evenly distributed
across the population. This can lead to a biased sample that does not accurately
represent the views and opinions of the entire population.
 The ambiguity of regulations around cryptocurrency in India can make it
challenging to assess the future position of digital currencies in the Indian
economy.
 Lack of proper information on various risks associated with cryptocurrency is a
significant concern for anyone considering investing or using digital
currencies. It is essential for individuals to educate themselves on these risks
and take appropriate measures to mitigate them.
 CHAPTER 2- CONCEPTUAL FRAMEWORK

2.1 WHAT IS CRYPTOCURRENCY?

Cryptocurrency is a type of digital or virtual currency that use cryptography to safeguard

and verify transactions, as well as to manage the generation of new units. Some basic
terms related to Cryptocurrency are given as follows-

 Blockchain: A blockchain is a decentralized and distributed digital ledger that

is used to record and verify transactions. Each block in the chain contains the
previous block's cryptographic hash, a timestamp, and transaction data.
 Cryptography: Cryptography is the practise of communicating securely in the
presence of third parties. In the context of cryptocurrencies, cryptography is
used to secure transactions and to control the creation of new units.
 Mining: Mining is the process of adding new transactions to the blockchain
and creating new units of cryptocurrency. Miners solve complicated
mathematical problems and validate transactions using powerful computers.
 Wallets: Cryptocurrency wallets are software programs that store private and
public keys used to transact with cryptocurrencies. Wallets can be
tangible objects or software programmes.
 Public and private keys: Cryptocurrencies use a public-key cryptography
system. Each user has a public key and a private key. The public key is used to
receive transactions, while the private key is used to sign transactions and
prove ownership of the cryptocurrency.
 Transactions: Cryptocurrency transactions are recorded on the blockchain and
are verified by miners. Transactions are irreversible and cannot be altered once
they are recorded on the blockchain.
2.2 MOST COMMON CRYPTOCURRECNIES
 Bitcoin (BTC): Bitcoin is the first and most well-known cryptocurrency. It is
used primarily as a digital currency for peer-to-peer transactions and as a store
of value.
 Ethereum (ETH): Ethereum is a blockchain platform that allows developers to
build decentralized applications (dApps) on top of its blockchain.
 Binance Coin (BNB): Binance Coin is the native cryptocurrency of the
Binance cryptocurrency exchange. It is used to pay for trading fees on the
exchange and to participate in token sales on the Binance Launchpad platform.
 Litecoin (LTC): Litecoin is a digital currency that is similar to Bitcoin but with
faster transaction times and lower transaction fees.
 Dogecoin (DOGE): It is used primarily as a digital currency for tipping and
donations on social media platforms.
 Ripple (XRP): Ripple is a blockchain platform that is used for global payments
and remittances. Its native cryptocurrency, XRP, is used to facilitate
transactions on the platform and to provide liquidity for cross-border payments.

2.3 POTENTIAL BENEFITS OF CRYPTOCURRENCY

 Decentralization: Cryptocurrencies are decentralized, which means that they
are not controlled by any central authority like a government or a bank. This
makes them more resistant to censorship, corruption, and interference from
third parties.
 Security: Cryptocurrencies use advanced cryptography to secure transactions
and protect against fraud and hacking. Transactions are recorded on a public
ledger called a blockchain, which makes it nearly impossible to alter or
manipulate the transaction history.
 Anonymity: Cryptocurrencies offer a level of anonymity and privacy that is not
possible with traditional payment systems. While transactions are recorded on
the blockchain, the identity of the parties involved is not revealed, making it
difficult to trace transactions back to individuals.
 Accessibility: Everyone with an internet connection, regardless of geography or
socioeconomic level, can access and use cryptocurrencies. This makes them
particularly useful for people who do not have access to traditional banking
services.
2.4 RISKS OF CRYPTOCURRENCY
 Market volatility: Cryptocurrencies are known for their extreme price
volatility, which can result in significant losses for investors. The price of
cryptocurrencies can be influenced by a range of factors, including market
speculation, regulatory changes, and news events.
 Cybersecurity risks: Cryptocurrency exchanges and wallets are vulnerable to
hacking and other forms of cyber-attacks. If a hacker gains access to your
cryptocurrency wallet, they can steal your funds without your knowledge or
consent.
 Regulatory uncertainty: The regulatory landscape for cryptocurrencies is
constantly evolving, and there is a lack of clarity for future laws and
regulations. This can create uncertainty and confusion for users and investors.
 Scams and fraud: Cryptocurrencies have been used to perpetrate scams and
fraudulent activities, including Ponzi schemes, fake initial coin offerings
(ICOs), and phishing attacks.

2.5 EVOLUTION OF CRYPTOCURRENCY

 2009 - Bitcoin was created by an anonymous person or group known as Satoshi
Nakamoto.
 2013 - The first cryptocurrency exchange in India, Unocoin was launched.
 2017 - Cryptocurrency prices, including that of Bitcoin, soared to record highs
in 2017, attracting widespread interest and investment. The Reserve Bank of
India (RBI) issued its first warning regarding cryptocurrencies.
 2018 - The RBI issued a circular that prohibited banks and other regulated
entities from dealing with cryptocurrencies. The Supreme Court of India set up
a committee to investigate the use of cryptocurrencies in the country and to
recommend a regulatory framework for the same. The Internet and Mobile
Association of India (IAMAI) filed a petition in the Supreme Court challenging
the RBI's circular banning banks from dealing with cryptocurrencies.
 2020 - The Supreme Court of India lifted the RBI ban on cryptocurrencies,
allowing individuals and businesses to trade in them again. The Indian
government was considering banning all private cryptocurrencies in the
country and was preparing a bill to this effect.
  2021 - The Indian government announced that it was considering the launch of
a digital version of the rupee, the country's national currency, which would be
regulated by the RBI.

2.6 CRYPTOCURRENCY: LEGAL TENDER IN INDIA?

Legal tender refers to the recognized currency that is accepted as a means of payment for
goods and services. In India, legal tender is the Indian rupee (INR). The Reserve Bank of
India (RBI) banned banks and other regulated entities from dealing in cryptocurrencies in
2018, due to concerns about money laundering and other financial crimes. However, this
ban was lifted by the Supreme Court of India in 2020, allowing individuals and
businesses to trade in cryptocurrencies. Despite the lifting of the ban, cryptocurrencies
are not considered legal tender in India. While they can be used as a form of investment
or payment, they are not recognized as a currency by the government.

2.7 CENTRAL BANK DIGITAL CURRENCY-INDIA

In January 2021, RBI formed a high-level interdepartmental committee to study the

feasibility of a CBDC – Central Bank Digital Currency. The CBDC would be a digital
version of the Indian rupee and would be a legal tender in the country. It will be issued by
the RBI and would be backed by the central bank's reserves.

Potential benefits of CBDC include reducing the cost of printing and distributing physical
currency, improving the efficiency and security of the payment system, enhancing
financial inclusion, and reducing the risk of money laundering and other illicit activities.
A CBDC could also provide greater visibility and control to the central bank over the
money supply and could facilitate the implementation of monetary policy.
2.8 BLOCKCHAIN & FINCIAL SECTOR IN INDIA
 Remittances: Companies such as Ripple and Stellar are working with banks
and payment providers in India to enable faster and cheaper remittances using
blockchain technology.
 Trade finance: The State Bank of India (SBI) has partnered with IBM to
develop a blockchain-based solution for trade finance that is expected to reduce
transaction times and costs.
 Know Your Customer (KYC) compliance: The National Payments Corporation
of India (NPCI) has developed a blockchain-based solution for KYC
compliance, which is expected to reduce fraud and enhance customer privacy.
 Digital identity: The government of India has launched a pilot project for a
blockchain-based digital identity system called IndiaChain, which is expected
to improve access to financial services for underbanked and unbanked
populations.
 Insurance: Blockchain-based insurance platforms like B3i are being used by
Indian insurance companies to improve the efficiency and transparency of their
operations.

2.9 RELATED LAWS & REGULATIONS

 The Prevention of Money Laundering Act, 2002 - This act aims to prevent
money laundering and the financing of terrorism. Cryptocurrencies could
potentially be used for money laundering, and so this act could be applied to
regulate cryptocurrency trading.
 The Income Tax Act, 1961 - The Income Tax Department of India has issued
notices to individuals and businesses engaged in cryptocurrency trading, asking
them to disclose their holdings and pay taxes on any gains.
 The Foreign Exchange Management Act, 1999 - While it has not yet been
specifically applied to cryptocurrency, it could potentially be used to regulate
cryptocurrency trading in the future.
 The Companies Act, 2013 - Companies that deal in cryptocurrencies could
potentially be subject to the provisions of this act.
 The Securities and Exchange Board of India (SEBI) has not yet issued any
specific regulations regarding cryptocurrency trading, but it has warned
investors about the risks associated with initial coin offerings (ICOs) and has
asked companies that are planning ICOs to seek its approval.
 CHAPTER 3 – DATA, ANALYSIS AND FINDINGS

OBJECTIVE 1: To analyse the legal status of Cryptocurrency as digital currency in

India.
 Area of Study: Legal status of Cryptocurrency in India.
 Type of Study: Exploratory and Descriptive Research.
 Tools used for Data Collection: Literature review of available secondary data and
government notifications and circulars.
 Period of Study: 2021-2023

ANALYSIS AND FINDINGS:

 RBI Circular 2018: In April 2018, the Reserve Bank of India (RBI) issued a circular
that prohibited all regulated financial institutions from providing services to
individuals or businesses dealing with cryptocurrencies.
 Supreme Court Judgment 2020: The Court held that the RBI circular violated the
fundamental rights of individuals and businesses by denying them access to banking
services solely on the grounds that they dealt with cryptocurrencies. The Court's
decision effectively lifted the ban on cryptocurrencies in India, and individuals and
businesses are now free to buy, sell, hold, and use cryptocurrencies.
 Proposed Cryptocurrency Bill: In early 2021, the Indian government proposed the
"Cryptocurrency and Regulation of Official Digital Currency Bill," which seeks to
ban all private cryptocurrencies in India and create a framework for a central bank
digital currency. The bill proposes to create a regulatory framework for
cryptocurrencies and provide clarity on their legal status in India.

The legal status of cryptocurrencies as a digital currency in India is still uncertain, they
are not explicitly banned, and individuals are free to own, buy, sell, or use
cryptocurrencies at their own risk. The proposed Cryptocurrency bill may provide clarity
on the regulatory framework for cryptocurrencies in India in the future, but its provisions
and implications are still uncertain.
OBJECTIVE 2: To examine the awareness of Indians about Cryptocurrency

 Area of Study: Awareness and knowledge of Indians about Cryptocurrency.

 Type of Study: Exploratory Research using Primary Data.
 Tools used for Data Collection: Close ended questionnaire.
 Sample Size:146 respondents
 Period of study: April 2023

ANALYSIS AND RESEARCH FINDINGS:

Demographic Data:

 58% of the respondents are Male and 42% are female respondents.
 Age of the respondents –

 Educational Qualifications of the respondents –

 Work Profile of the respondents -

 Basic Investment Profile of the respondents -

  Risk Profile of the respondents -

Data on Concept and Awareness about Cryptocurrency

 74% of the respondents believe that Cryptocurrency is a type of digital currency that
is decentralized and operates independently of a central bank.
 Bitcoin, Ethereum and Dogecoins are the most commonly known Cryptocurrency-

 68% of the respondents correctly understand the concept on blockchain on the other
hand 18% are unaware of the concept-
 Only 40% of the respondents are aware about “Decentralization” whereas 20%
are unaware of the concept-

 56% of the respondents are not aware of the concept of “Miner”, 50% have given the
incorrect answer. Only 29% know the correct meaning of the term-
 The most popular Cryptocurrency is Bitcoin -

 47% of the respondents are aware of Dogecoin but 32% are not aware of the same-
 Most common apps in India to invest in Cryptocurrency –
OBJECTIVE 3: To undertake a comparative analysis of the risks of investment
in Cryptocurrency and conventional investments.

 Area of Study: Comparative analysis between risks of Cryptocurrency and

conventional investments
 Type of Study: Exploratory Research using Primary Data.
 Tools used for Data Collection: Close ended questionnaire.
 Sample Size: 147 respondents.
 Period of study: April 2023

ANALYSIS AND RESEARCH FINDINGS:

 The respondents believe that Cryptocurrency possess most risk and Gold/FD possess
the least % of risk as categories for investment-
 The respondents believe that Equity generates most returns, followed by
Cryptocurrency and Bonds generate the lowest ROI.

 Most of the respondents highly believe in the Advantages of Cryptocurrency -

 The respondents believe that lack of proper regulation is the greatest risk, high Capital
Gains Tax and lack of awareness are also significant risk factors-

 The respondents will allocate funds in their portfolio in the following order:
1. Zero – Least investment in Cryptocurrency
2. 1-20% - Bonds
3. 20-40% - Real Estate
 4. 40-60% - Equity
5. 60-80% - Gold

COMPARITIVE ANALYSIS-
OBJECTIVE 4: To understand the future prospects of Cryptocurrency by using a SWOT
analysis.

 Area of Study: Future of Cryptocurrency in India

 Type of Study: Exploratory and Descriptive Research
 Tools used for Data Collection: SWOT Analysis
 Period of study: April 2023

ANALYSIS AND RESEARCH FINDINGS:

 Strengths-
 Growing interest: There is growing interest in cryptocurrencies in India, with an
increasing number of individuals and businesses investing in and using
cryptocurrencies.
 Decentralized nature: Cryptocurrencies are decentralized, and they operate
independently of central authorities like governments and banks, providing users
with greater control over their assets.
 Potential for innovation: Cryptocurrencies have the potential to drive innovation
in the financial sector by enabling faster, cheaper, and more secure transactions.
 Weaknesses-
 Lack of regulatory clarity: There is currently no clear regulatory framework
governing the use of cryptocurrencies in India, creating uncertainty for users and
businesses.
 High volatility: Cryptocurrencies are highly volatile and subject to price
fluctuations, making them risky investments for individuals and businesses.
 Security risks: Cryptocurrencies are vulnerable to hacking and fraud, with
several high-profile security breaches in the past leading to significant losses.
 Opportunities-
 Market growth: The Cryptocurrency market in India has the potential for
significant growth, driven by increasing interest in cryptocurrencies and the
potential for innovation in the financial sector.
 Adoption by businesses: As more businesses begin to accept cryptocurrencies as
a form of payment, it could increase their adoption and legitimacy in India.
 Regulatory clarity: If a clear regulatory framework is established for
cryptocurrencies in India, it could provide greater clarity and legitimacy for users
and businesses and increase confidence in the market.
 Threats-
 Government intervention: The Indian government has expressed concerns about
the risks associated with cryptocurrencies and could potentially ban or restrict
their use in India.
 Competition from other assets: Cryptocurrencies face competition from other
assets, such as gold, real estate, and traditional financial instruments, which are
considered safer investments by some.
 Perception among general public: Cryptocurrencies are still relatively new and
unfamiliar to many people in India, which could limit their adoption and use.
 CHAPTER 4 – CONCLUSION & RECOMMENDATIONS

4.1 FUTURE AREAS OF RESEARCH

 Regulatory Framework: Studying the current regulatory environment, analysing

international best practices, and proposing a regulatory framework that balances the
benefits of cryptocurrencies with the need to address potential risks.
 Adoption and Use: Analysing the factors that influence adoption and use, the barriers
to entry, and the potential for cryptocurrencies to be used as a means of payment or
investment in different sectors of the economy.
 Impact on Financial Inclusion: Research could be conducted to analyse the impact
of cryptocurrencies on financial inclusion in India and explore the potential for
cryptocurrencies to provide access to financial services to marginalized populations.
 Cybersecurity: Studying the potential risks and vulnerabilities associated with the use
of cryptocurrencies, identifying best practices for mitigating these risks, and
proposing strategies for enhancing cybersecurity in the cryptocurrency ecosystem.
 Social and Ethical Implications: This could involve analysing the impact of
cryptocurrencies on economic inequality, social norms, and ethical considerations
related to the use of cryptocurrencies.

4.2 POLICY RECOMMENDATIONS

 Clarify regulatory framework: The Indian government could provide clear guidelines
and regulations for the use of cryptocurrencies in the country. This would help to
reduce uncertainty and provide more clarity for investors, traders, and other
stakeholders in the cryptocurrency ecosystem.
 Encourage innovation: The government could encourage innovation in the
cryptocurrency sector by providing tax incentives or other incentives for startups and
businesses that are developing new cryptocurrency technologies or applications.
 Address money laundering and fraud: The government could take steps to address
the potential risks associated with cryptocurrencies, such as money laundering and
fraud. This could involve implementing stricter KYC and AML regulations for
cryptocurrency exchanges and service providers.
  Promote financial literacy: The government could promote financial literacy among
the public to help ensure that individuals are able to make informed decisions about
investing in cryptocurrencies by launching public awareness campaigns or including
financial literacy topics in school curriculums.
 Foster international collaboration: The Indian government could work with
international organizations and other countries to develop international standards and
best practices for regulating cryptocurrencies to promote cross-border adoption and
use of cryptocurrencies.
 Encourage research and development: The government could encourage research by
providing funding or other incentives for academic institutions and researchers to
conduct studies on the impact of cryptocurrencies on the Indian economy.

4.3 CONCLUSION

 The findings of this research reveal that cryptocurrency is not yet recognized as a
legal tender in India, and it operates in a grey area. Despite this, the Indian public has
shown a growing interest in cryptocurrency, and many people have invested in it.
However, there is still a lack of awareness and understanding of the risks associated
with cryptocurrency investment.
 Furthermore, this research compared the risks and rewards of conventional investment
and cryptocurrency in India and found that while cryptocurrency investment can yield
high returns, it also poses significant risks due to its volatility and lack of regulation.
 Finally, the SWOT analysis conducted on the future of cryptocurrency in India
revealed that while there are opportunities for growth, such as the increasing adoption
of blockchain technology, there are also challenges, such as the lack of clarity on
regulations and the potential for fraud and cybercrime.
 CHAPTER 5 – REFERNECES

 Rajan, A., Kaur, H., Singh, A. K., Sisodia, D. R., & Garg, A. K. (2022). A critical
analysis of the emergence and development of cryptocurrencies and how it impacts
the current economic activities. International Journal of Advanced Research, 10(1),
301-315.
 Sharma, K. (2022). Analysis of Cryptocurrency: An Ethical Conjecture with
Reference to Indian Scenario. Sachetas, 9(1), 15-26.
 Sharma, R., & Gautam, S. (2022). Cryptocurrency: A New Investment Avenue in
India. In Handbook of Research on Innovative Technology Trends in Business and
Management: 41-59. IGI Global.
 Shikha, & Bhargava, R. (2022). Changing Face of Cryptocurrency and the Need for
Regulation. DME Journal of Management, 16(1), 37-48.
 Wisetsri, W., Vijai, C., Kasidit, C., & Jirayus, P. (2022). Cryptocurrency - An
Overview. Journal of Positive School Psychology, 6(1), 65-72.
 Bala, A. (2021). Cryptocurrency and Its Scope in India. International Journal of
Engineering and Advanced Technology Studies, 11(3), 81-87.
 Bholane, D. K. P. (2021). Pros and Cons of Cryptocurrency: A Brief Overview.
National Journal of Research in Marketing, Finance & HRM, 6(3), 71–78.
 Gowda, I. P. M. (2021). Cryptocurrency in India: Government's Stand and Legal
Status. Journal of Business Management and Commerce, 3(1), 1-10
 Mubarak, D., & Manjunath, H. (2021). A Study on Cryptocurrency in India.
International Journal of Advanced Science and Technology, 30(2), 3901-3910.
 Parab, L. J., & Nitnaware, P. P. (2021). Investigating existence of cryptocurrency
over traditional investment in India: A comparative study. Investment Management
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 Parnami, P., & Mathur, S. (2021). Awareness and adoption of cryptocurrency
among entrepreneurs of Jaipur city. Journal of Entrepreneurship, Management and
Innovation, 17(2), 173-188.
 Shetty, S. K., & Cristi, O. (2021). Perceived attitude of youth towards
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 Irfan, S. B., & Malavika, M. (2020). Opportunities and Challenges of
Cryptocurrencies in India - A Study. International Journal of Scientific Research
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 Jani, S. (2020). The growth of cryptocurrency in India: Its challenges and potential
impacts on legislation. International Journal of Advanced Research in Computer
Science, 11(3), 99-102.
 Jani, S. (2020). The growth of cryptocurrency in India: Its challenges and potential
impacts on legislation. International Journal of Advanced Research in Computer
Science, 11(3), 99-102.
 Anil Kumar, V. V., & Swathy, P. (2019). A Study on Opportunities and Challenges
of Cryptocurrency in India with Special Reference to Bitcoin. International Journal
of Research and Analytical Reviews, 6(1), 774–779.
 Devi, M. S. (2019). Bitcoin - An Overview. Shanlax International Journal of
Commerce, 7(2), 18-21.
 Dorbala, R. (2019). The orphaned status of cryptocurrencies in India. Journal of
Management and Science, 9(1), 29-36.
 Vishwakarma, P., Khan, Z., & Jain, T. (2019). Cryptocurrency and legal framework
in India. International Journal of Advance Research and Innovative Ideas in
Education, 5(4), 524-527.
 Govindasamy, R. (2018). Introduction to Cryptocurrency: An Overview. Journal of
Applied Research in Higher Education, 10(1), 1-11.
 Purohit, H. (2018). A Study on Prospects and Experiments of Cryptocurrency in
India with Special Reference to Bitcoin. International Journal of Management and
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 https://www.forbes.com/advisor/in/investing/cryptocurrency/crypto-
bill/#:~:text=Based%20on%20the%20various%20key,ban%20on%20it%20in%20I
ndia.
 https://www.mondaq.com/india/fin-tech/1194412/legal-status-of-cryptocurrencies-
in-india--government-recognition-and-tacit-de-facto-approval-of-digital-currency
 https://vakilsearch.com/blog/is-cryptocurrency-legal-in-india-in-2023/
 https://www.legalserviceindia.com/legal/article-9660-current-status-of-
cryptocurrency-in-india.html
 https://www.globallegalinsights.com/practice-areas/blockchain-laws-and-
regulations/india
 ANNEXURE 1

QUESTIONNAIRE

Demographic and General Questions

1. Name -
2. Gender -
a. Male
b. Female
c. Other
3. Age -
a. Below 18 Years
b. 18-25 Years
c. 26-35 Years
d. 36-45 Years
e. Above 46 Years
4. What is your Educational Qualification?
a. Higher Secondary
b. Pursuing Graduation
c. Graduate
d. Post Graduate
e. Phd
f. Professional
g. Other
5. What is your Occupation?
a. Student
b. Part-timer
c. Salaried
d. Self Employed (Business/Profession)
e. Homemaker
f. Other
6. How do you describe your Investment Profile?
a. I do not believe in making Investments.
b. I invest in Securities (refers to all Instruments and Periods)
 c. I invest in Mutual Funds (Debt and Equity)
d. I invest in Gold/Bonds/Fixed Deposits
e. I invest in Real Estate
f. Other
7. How do you describe your Risk Profile?
a. Risk Averse/Conservative
b. Neutral
c. Risk Seeking/Aggressive
d. I don't know
Cryptocurrency - Concept and Awareness
8. What is your understanding of - Cryptocurrency?
a. A type of digital currency that is backed by a government.
b. A type of digital currency that is decentralized and operates
independently of a central bank.
c. A type of digital currency that is only used for online purchases.
d. I am not aware
9. Out of the Cryptocurrencies given below - select the ones you have
previously heard of -
a. Bitcoin
b. Bitcoin Cash
c. Enjin Coin
d. XRP (Ripple)
e. Cardano
f. Monero
g. Dogecoin
h. Litecoin
i. Syscoin
j. Musicoin
k. Ethereum
l. Other
10. What do you understand about “Blockchain”?
a. A type of cryptocurrency
b. A decentralized digital ledger that records transactions
 c. A type of computer hardware
d. I am not aware
11. Which of the following is a key feature of Blockchain technology?
a. Centralized control
b. Security
c. Decentralization
d. I am not aware
12. What is the role of a "Miner" in the context of Cryptocurrency?
a. Someone who creates new cryptocurrencies.
b. Someone who verifies and records cryptocurrency transactions.
c. Someone who buys and sells cryptocurrency.
d. I am not aware
13. Which of the following according to you is the most popular Cryptocurrency?
a. Ripple (XRP)
b. Bitcoin (BTC)
c. Ethereum (ETH)
d. Other
14. Which Cryptocurrency was created as a joke but has since become widely
popular?
a. Dogecoin
b. Ripple
c. Bitcoin
d. I am not aware
15. Which of the following Apps will you use to invest/trade in Cryptocurrency in
India?
a. WazirX
b. CoinSwitch Kuber
c. Zebpay
d. CoinDCX Go
e. Zerodha Coin
f. Other
 Cryptocurrency and Investment Behaviour
16. Rate the following investment options based on the risks they possess:

Particulars Low Moderate

Equity Shares/MF

Bonds/
Debt MF

17. Rate the following Investment options on the basis of the returns you think
they generate:

Particulars Low Moderate

Equity Shares/MF

Bonds/
Debt MF
18. Which of the following are the “Advantages” of investment in
Cryptocurrency?

Particulars

Decentralization
Higher Returns
Easy Accessibility

Lower Transaction Cost

19. Rate the following Cryptocurrency Risks (from low risk to risk being a
barrier to investment):

Particulars Low Moderate

Risk Risk

No Regulation
Volatility Risk
Cybersecurity Risk
Assuming
20. you had INR 10,00,000 for building a diversified investment portfolio, what proportion of it

Particulars 0% 1-20% 20-40% 40-60% 60-80% 80-

100%
Equity Shares/MF
Bonds/Debt MF
Real Estate

Gold/FD
Commodities

Cryptocurrency