Recently after the American president Joe Biden signed an executive order to address concerns related to crypto regulation and CBDC, the Indian Finance Minister revealed India’s progress in developing CBDC.
India’s Finance minister, Nirmala Sitharaman, shared the ongoing plan while talking at India global forum 2022. She confirmed that the entire project of developing CBDC is handed over to the Reserve bank of India. She said:
“It was a conscious call taken in consultation with the central bank – the Reserve Bank of India. We would like them to design it the way they would like to do it, but this year we expect the currency to come out from the central bank itself”
Notably, India has stepped forward in bringing a proper regulatory framework for digital assets. In the year budget this year, the Indian government announced its plan to charge a 30% tax on crypto earnings. The government has not disclosed any tentative date for this new rule to be applicable. Nevertheless, it is considered the 1st legal leap in recognizing crypto in the country.
India is believed to have fifteen to twenty million crypto-investors with a total of 400 billion dollars (around $5.2 million) in cryptocurrency.
If it is issued with a CBDC could create India as one of the most prominent nations to issue digital currencies. China has already begun testing its digital currency, known as the e-CNY.
The development of Central bank digital currency (CBDC) will put India on the elite list of countries actively working on getting their own digital currency.
A digital currency could open the way for faster large-scale payments and enhance the capacity of central banks to allow for larger transactions among central banks.
Are cryptocurrencies legal in India?
Cryptocurrencies are not adequately regulated in India; however, the government recognizes crypto and charges a 30% tax on income made in crypto.
What is CBDC?
CBDC (Central Bank Digital Currency) is a term used for digital currencies developed and backed by a national government. Many countries are working to develop their own CBDC.