Research proposal examines cryptocurrency regulation issues in India. For the past few years, cryptocurrency has gained popularity worldwide, and in India, it has turned out to be a hot topic of discussion.

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Research Proposal and Literature Review

Research Proposal and Literature Review

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Research Proposal and Literature Review Crypto Currency Regulation Issues in India Table of Contents 1. Introduction 2 2. Background to the study 2 3. The literature review 3 4. Methodology and analysis 5 5. Conclusion 5 6. References 7 Appendix 1 Data Sources 7 Introduction This research proposal examines cryptocurrency regulation issues in India. For the past few years, cryptocurrency has gained popularity worldwide, and in India, it has turned out to be a hot topic of discussion. The is an ongoing debate and heated argument against regulating cryptocurrency in India. Cryptocurrency proponents argue that regulation would impede innovation and make it challenging for new players to enter the market. Regulating cryptocurrency in India could also make it hard for people to access new investments. Cryptocurrency is not banned in India and does not pose any potential threat. The scarcity of cryptocurrency exchanges from accessing vital financial institutions such as banks as well as other payment networks would be inconsistent (Yadav, 2021). In the recent legislation, the Finance Ministry of India issued a gazette notice requiring the cryptocurrency exchanges and mediators dealing with other forms of digital currencies to carry out know your customer (KYC) on their clients and users. Therefore, this project aims to address the critical question around issues concerning cryptocurrency regulation in India. The project would examine the fundamental concepts, such as whether cryptocurrency should be regulated in India and whether benefits would be obtained due to such regulations. The anticipated answer to this main research question is expected to reveal that regulating cryptocurrency would stifle innovation and make it challenging for the new player to invest in the Indian market. Background to the study The first circular of cryptocurrency was introduced by the Reserved Bank of India in 2013. Even before the Reserve Bank of India issued the cryptocurrency, many cryptocurrency exchanges were happening in India, such as Zebpay and Unocoin (Yadav, 2021). Since its issuance in cryptocurrency has constantly been subjected to scrutiny by those in the financial market. The Reserve Bank of India has continuously warned cryptocurrency users, holders, and traders of this virtual currency, including Bitcoin, concerning its potential financial, functional, lawful, customer safety, and security-associated threats. After the demonetization, as the crypto market was developing speedily in India, caution was issued, pointing out that digital currency is not legal tender in India. The Reserve Bank of India has also given a notice to financial institutions such as banks and other payment channels restraining them from dealing with digital currency. The graph depicts investment in blockchain and crypto currency startups as significantly showing a rapid growth in India. Key players in the financial market have worked with the Reserved Bank of India to promote a positive campaign about using digital currencies such as crypto. In 2020, there was an upsurge in cryptocurrency investment in India, as shown in the graph above, because the Supreme Court of India struck down the ban on cryptocurrency banking, maintaining that the caution issued by the Reserve Bank of India was unconstitutional. In a pact with the Supreme Court Ruling, the Indian government introduced a Bill to establish a national digital currency and protect private virtual currencies such as crypto, meaning that cryptocurrency should not be banned but regulated. In the yearly budget, the Ministry of Finance highlighted that government would significantly benefit from taxing cryptocurrency investment, increasing the tax fund by approximately thirty percent. Despite that being received positively by the government and the financial institutions, the Indian government has not given the measure around the legal status of cryptocurrency. The literature review Research questions The broad research questions for this study include the following; What are the regulation issues around cryptocurrency in India? How does taxing cryptocurrency investments benefits the Indian government? Why has the Indian government not given the measure legal status for cryptocurrency? Theoretical frameworks The study (Yadav, 2021) defined cryptocurrency as the digital depiction of worth that can be stored and exchanged digitally. Many countries have continuously implemented measures to regulate the use of digital currency, such as crypto, or ban it for good. The Indian government has not entirely banned cryptocurrency, nonetheless, it has not given the measure of its legal status. The issues that affect cryptocurrency investment in India can be primarily attributed to the government not defining the legal standards regulating cryptocurrency operations in Indian Jurisdictions. Virtual currencies were invented with the motive of enhancing paperless transactions by allowing the transfer of funds digitally (Yousuf, Hasan, and Khan 2020). The Indian government has permitted cryptocurrency integration into its mainstream financial system, although it is not considered a legal tender, thus raising many questions about the operationality of this virtual currency in the country. The step taken by India to enforce money laundering regulations on cryptocurrencies demonstrates that governments across the globe recognize the significance of having specific provisions in place to avert criminal actions, including money laundering as well as terrorist financing. Data used The data for this research comprised information gathered, observed from the trends, and developed to validate the study on cryptocurrency regulation issues in India. Even though the collection of data used for this research is mainly digital, the study data also integrates non-digital formats, including notebooks as well as diaries that report on cryptocurrency regulation in India. The data used in this research proposal is mainly from secondary sources, including publications from the Indian government, reliable websites, journal articles, and books, and This research project is for educational purposes. Therefore, using secondary data sources is crucial for devoting more time in the research work and limiting the potential loss of time that would be taken when carrying out the primary research studies. Analytical Methods Analytical methods for this study comprised the techniques for this qualitative study to determine the cryptocurrency regulation issues in India. For this study, analytical techniques would be significant for drawing certain conclusions concerning cryptocurrency regulation in India. The approach to the selected analytical methods would depend on this being carried out. Minus the use of analytics techniques, it would be challenging to establish why the Indian government has not designed the measures defining the legal status of cryptocurrency. Therefore, analytics methods would be effective for determining specific conclusions about the research topic. For this study, exploratory and descriptive data analysis methods will be used in order to generate study results and arrive at a particular conclusion on cryptocurrency regulation issues in India. Results The results of this research proposal are expected to point out that the government’s absence of defined measures to dictate the legal status of cryptocurrency is causing regulation issues in the recent proposal Indian planned for placing a 30% tax which is considered the highest taxation slab in the country on income generated from the cryptocurrency investment (Shukla, Misra, and Chaturvedi 2022). Many of the concerned stakeholders in the digital currency market, such as significant financial institutions and crypto investors, argued that the move to impose such a high tax on cryptocurrency investment would damage the virtual currency market and potentially, the Reserve Bank of India would capitalize on the opportunity to create its virtual currency or crypto. With a relatively lower tax slab, India is posed to significant benefit from taxing cryptocurrency investments, and lower tax rates would attract more investors. The future of crypto and other digital currencies appears blurry in India as the government increasingly tightens its regulations on such currencies without providing the measures to define their legalities (Narayanan, 2020). The increased incidences of money laundering and criminal activities, including terrorist financing, have forced the ideal government to be reluctant to give the measure for legal status for cryptocurrency. Methodology and analysis The data for this research would be collected from secondary data sources such as Indian government publications, the Publications from the Indian government, websites, journal articles about cryptocurrency regulation issues in Indian and internet notes. After the data is collected from secondary sources, it will be analyzed using exploratory data analysis techniques. The analysis steps will include: step1: data collection, this will involve taking data from the outlined sources that explains more about how cryptocurrencies perform in India. Step 2: finding all variables related to our research topic and understanding those variables, these variables may include price of the cryptocurrency, market capitalization, demand and supply, profitability etc. step 3: cleaning the data set. The research should be free from irrelevant information that will make our research outcome to be less valid and less reliable. Step 4: identifying correlated variables. This will help us understand more the relationship between the different variables. And how regulations consider these factors. For example, correlated variables will help us know how price of the cryptocurrency relate or influence the demand and supply of that crypto. And how this relation will affect regulations in making their laws regarding cryptocurrency in India. Step 5: choosing the right statistical method. For our research, SPSS is the best method that will be used. This is the best method because it is more accurate and reliable especially when analyzing a huge data. It will help us identify patterns, trends and correlation of the data used. Step 6: visualizing and analyzing results. Data from qualitative research should also be included in the study. To understand and recognize the numerous reasons and variables influencing the rules of cryptocurrency in India, data should be qualitatively studied. This could include the government’s desire to safeguard the financial system of India and the interests of investors and customers. Using experimental methods for this analysis would allow the researcher to discover new information about cryptocurrency regulation in Indian and define the future of virtual currency in India. Also, the data collected would be analyzed using descriptive data analysis techniques such as frequency tables, central tendency and dispersion. The technique would allow the critical elements of gathering data quantitatively. The illustrative approach requires minimal effort and generates significantly informative results. The qualitative data collected from the data sources would be analyzed by connecting and organizing the information, coding the data, and analyzing them based on their relevancy to the topic. The quantitative data from the identified data sources would be analyzed using SPSS because it is flexible, give comprehensive results, and can be used with any data set. The process of testing the hypothesis for this research would include the procedure for investigating ideas around cryptocurrency regulation issues in India. The actions that would be undertaken when testing the hypothesis would consist of defining the hypothesis and establishing the claim, then finding the crucial value as well as the test value. The critical and test values would then be compared to determine whether the hypothesis should be accepted or rejected as a null hypothesis. The necessary data for this research would comprise the most recent trends in cryptocurrency investment in India. The characteristics of the data used in this study would be descriptive and predictable frequency distribution. Conclusion In summary, India currently faces numerous cryptocurrency regulation issues as the government is reluctant to give the measures that define its legality and use in the country. Therefore, this project plays a significant role in providing comprehensive and detailed information about the future of cryptocurrency in India and why the government should regulate it rather than ban it altogether. The research contributed significantly to understanding how to access the virtual currency taking over the Indian financial market. The knowledge gathered from this report is essential for helping build a more understanding of crypto currency woks and its determination to create a more equitable and fairer world by supporting equal access to income and eliminating barriers to money transfers. As the blockchain is a growing area of employment, a project aiming to understand cryptocurrency regulation is increasingly becoming significant, with the increasing number of investors desiring to use cryptocurrency for their transactions. References Narayanan, H., 2020. Is future a rule of digital currency. International Journal of Research-GRANTHAALAYAH, 8(8), pp.96-106. Shukla, V., Misra, M.K. and Chaturvedi, A., 2022. Journey of cryptocurrency in India in view of Financial Budget 2022-23. arXiv preprint arXiv:2203.12606. Yousuf Javed, M., Hasan, M. and Khan, R., 2020. Future of bitcoin in India: Issues and challenges. Journal of Statistics and Management Systems, 23(2), pp.207-214. Yadav, A. (2021). Cryptocurrency in India: to Ban or not to Ban. Aman Kumar Yadav, ‘Cryptocurrency in India: To ban or not to ban’ (The RMLNLU Law Review Blog, 2 March 2021), available at: https://rmlnlulawreview. com/2021/03/02/cryptocurrency-in-india-to-ban-or-not-to-ban.

Appendix 1 Data Sources

Table 1 Data Sources

Series

Description

Source

Statista

Cryptocurrencies – India

https://www.statista.com/outlook/dmo/fintech/digital-assets/cryptocurrencies/india, accessed 4 May 2023

The Times of India

Cryptocurrency ownership statistics

https://timesofindia.indiatimes.com/business/cryptocurrency/blockchain/cryptocurrency-adoption-index-and-patterns-in-india-finders-report-april-2022/articleshow/91795988.cms, accessed 4 May 2023.

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