India reveals CBDC plans along with new crypto tax
India’s Finance Minister, Nirmala Sitharaman, revealed the country’s plans for a developing a CBDC, along with regulatory announcements relating to the taxation of cryptocurrency
India is the latest country to announce its plans for the development of a CBDC, following countries like Canada, South Korea, and China
The digital rupee is to be launched sometime this year or early 2023
During the annual budget speech, the Finance Minister explained that a digital rupee will boost the digital economy and will result in a more efficient and cheaper currency management system.
Accompanying the rollout of a CBDC will be a 30% tax tariff on income from virtual assets (cryptocurrencies and NFTs), placing it in the highest tax band in the country.
“There has been a phenomenal increase in transactions in virtual digital assets,” Sitharan said. “The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.”
The introduction of regulation to the crypto industry in India was widely welcomed by those in the crypto community. Sumit Gupta, co-founder and CEO of Indian crypto exchange CoinDCX, said in a tweet that the budget was “largely positive, albeit slightly bittersweet,” possibly referring to the tax proposal. “But this is just the beginning of the larger process of mass adoption. The introduction of CBDC sends a clear signal of India being a digital-first, efficiency-driven, and transparency-led system,” he said. “CBDC with the backbone of Blockchain will help us hold a powerful position in the global economy. We welcome this visionary move.”