India Is Planning To Initiate Digital Currency
India has decided to introduce a digital version of its currency. India’s finance minister declared that they will launch a digital version of the rupee this year. In her annual budget speech, India’s finance minister Nirmala Sitharaman shared the plan for imposing a 30% tax on income from digital assets.
By this declaration, India becomes the latest major economy that is moving towards virtual currency officially. It is expected that trading or transferring cryptocurrencies and non-fungible tokens help the country to earn the highest tax band. Previously China has initiated its digital yuan. But they had banned the trading and mining of cryptocurrency.
Ms. Sitharaman mentioned that the magnitude and frequency of digital asset transactions “have made it imperative to provide for a specific tax regime”. Ms. Sitharaman said, “Introduction of a central bank digital currency will give a boost, a big boost to (the) digital economy,” She also added, “Digital currency will also lead to a more efficient and cheaper currency management system.”
Cryptocurrency trader Sumit Gupta said, “A tax rate of 30% is on par with that imposed on gains from speculative activities like a lottery, gambling, and other gaming activities. That proposed 30% might act as a dampener for greater adoption.”
However, the Reserve Bank of India (RBI) banned the trading of cryptocurrencies in 2018. The bank authority has issued several warnings about the security-related risks related to virtual currencies such as Bitcoin.