The Indian government is planning to introduce Digital Rupee powered by blockchain and other technologies in the country as early as 2022.
The Central Bank Digital Currency (CBDC) will give a boost to India’s digital economy, Finance Minister Nirmala Sitharaman said while presenting the Union Budget 2022-23.
“Digital currency will also lead to a more efficient and cheaper currency management system,” she added.
Sitaraman also told the parliament that the government will impose a tax of 30% on “any income from transfer of any virtual digital asset” or cryptocurrencies and NFTs.
Furthermore, “loss from transfer of virtual digital asset cannot be set off against any other income.”
The announcement comes at a time when there is speculation in the Indian crypto market if cryptocurrencies will be banned or regulated.
The Reserve Bank of India has voiced its concerns on multiple occasions regarding cryptocurrencies.
Earlier, media reports emerged that the Indian government is drafting a bill that could bring digital assets into the ambit of the Securities and Exchange Board of India.
Meanwhile, India’s finance secretary TV Somanathan told news agency ANI that Crypto’s like Bitcoin and Ethereum will never become legal tender.
“Digital rupee will be backed by RBI which will never be default. Money will be of RBI but the nature will be digital. Digital rupee issued by RBI will be a legal tender,” Somanathan was quoted by the news agency as saying.
“Rest all are not legal tender, will not, will never become legal tender,” he added.