While imposing new taxes on crypto assets, the Indian government has directed the central bank to start developing a central bank digital currency (CBDC).
In her budget speech yesterday, Finance Minister Nirmala Sitharaman announced a set of new taxes on crypto-asset transactions, announcing that the government will take 30% of "any income from the transfer of any virtual, digital asset" as well as a 1% "tax deducted at source"
Sitharaman also proposed that India's central bank issue a "digital rupee" based on "using blockchain and other technologies"
In a speech to parliament, Sitharaman said, "Introduction of a central bank digital currency will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system."
The CBDC, according to Sitharaman, is "to be issued by the Reserve Bank of India starting 2022 and 2023"
Many crypto investors have applauded the move, as it appears that the government has dropped plans to ban crypto assets.
The country's central bank attempted a complete ban on cryptocurrency transactions in March 2020, but the Supreme Court overruled it.
After the announcement, Sitharaman denied the government had reached a final decision on crypto-asset regulation in a television interview with Indian outlet DD National.
"We don't know yet how we are going to regulate them," she said, referring to a consultation on crypto assets that is currently underway.
By fLEXI tEAM