Cryptocurrency in India: Changing the Game for Governance and Finance

Abstract

Cryptocurrency is reshaping the world of finance and government control. In India, it is creating both opportunities and challenges. While more people are showing interest in digital currencies like Bitcoin and Ethereum, the Indian government is still deciding how to regulate and manage this fast-growing sector. This research paper studies how cryptocurrency is affecting governance and the financial system in India. The study is based on secondary data, including government reports, policy papers, financial news articles, and academic studies. It focuses on India’s key regulatory moves, such as the 30% tax on crypto income and the 1% TDS (Tax Deducted at Source) on crypto transactions. By analysing this data, the paper looks at how these policies have impacted crypto trading, innovation, investor behaviour, and regulatory compliance. It also explores how cryptocurrencies challenge traditional financial rules in areas like taxation, money laundering control, and capital flow regulation. At the same time, it highlights how blockchain technology which is used in cryptocurrencies can help to improve transparency, financial inclusion, and reduce corruption in public governance. The findings suggest that while India’s strong regulatory stance aims to manage risks and protect users, it may also slow down technological growth and push crypto activities underground. This paper argues for a balanced policy that supports innovation while maintaining financial security. Overall, the study provides a clear picture of how cryptocurrency is influencing governance and finance in India, and offers useful insights for policymakers looking to build effective and future-ready regulations.