India Opposes Crypto and Will Instead Launch a CBDC
The Reserve Bank of India (RBI) has refuted any rumours that the government intends to establish a cryptocurrency that would be controlled by the RBI, instead of focusing on CBDC as a digital counterpart to the rupee.
Pankaj Chaudhary, India’s State Minister for Finance, made the comment in response to a direct enquiry from Rajya Sabha, the country’s upper house of parliament, about the central bank’s RBI Cryptocurrency initiative.
When Rajya Sabha member Sanjay Singh inquired “if it is true that the government is intending to launch a cryptocurrency controlled by the Reserve Bank of India,” Chaudhary said, “no sir.”
He did, however, refer to India’s proposed central bank digital currency (CBDC), which would be a digital version of the country’s existing paper currency, the rupee.
Could the CBDC have an impact on India’s digital economy?
Nirmala Sitharaman, the finance minister, said last week at the India Global Forum that the RBI will establish a CBDC within a year after consulting with the government.
According to her, the digital rupee has various advantages: “In today’s world, bulk payments between nations, huge transactions between institutions, and massive transactions between each country’s central banks are all made easier by the use of a digital currency. As a result, we believe the RBI would be searching for the most effective way to communicate it.”
Chaudhary said affirmatively at the congressional hearing when Singh inquired if the administration is aware that digital assets “are unregulated and immune to government action.” “At the moment, cryptocurrencies are uncontrolled in India,” the source told lawmakers.
Singh also requested information regarding the CBDC and its anticipated rollout this year, highlighting the distinction between the RBI’s digital currency and traditional paper cash:
“The Reserve Bank of India does not issue cryptocurrencies. Paper money is legal tender and is issued by the RBI in accordance with the stipulations of the RBI Act, 1994. Central bank digital currency (CBDC) is a digital equivalent of conventional paper cash,” Minister Chaudhary said.
On Wednesday, Indian crypto advocates urged members of parliament to offer clarification on the planned crypto law, which has been postponed twice.
On Feb. 1, 2022, India is proposing a 30% tax on the revenues from the selling of cryptocurrencies and other digital assets. Additionally, a 1% source-based tax was imposed on payments made to transfer digital assets.
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