- India Finance Minister proposes central bank digital currency (CBDC) launch by 2022-23.
- The goal is to expand India’s digital economy to a different level.
- The CBDC will function as an alternative currency to the Indian rupee with a 30% chargeback.
India is exploring a simplified infrastructure with endless possibilities to launch a central bank digital currency (CBDC) anytime soon between 2022 and 2023. India’s Finance Minister Nirmala Sitharaman disclosed the CBDC launch during India’s 2022 budget discussion. The CBDC will have a 30% crypto tax on inbound and outbound transactions.
Nirmala Sitharaman explained,
Any income from transfer of any virtual digital asset shall be taxed at the rate of 30%. No deductions in respect of any expenditure or allowance shall be allowed while computing such income, except the cost of acquisition.
The goal of the CBDC is to boost and expand the economic growth in India and its diaspora. Additionally, the CBDC will function as an alternative currency or digital version of the Indian native currency — Rupee. The developers will create the CBDC using blockchain technology. This means that the CBDC will operate with a new wave of technology using blockchain as its backbone.
It is therefore proposed to introduce digital rupee using blockchain and other technologies to be issued by the Reserve Bank of India, starting 2022-23.
Furthermore, the CBDC will take proactive action to supercharge and turn the phase of the digital economy in India to a new different level. Moreover, the CBDC will be available with a wide array of possibilities to bring an efficient and cheaper financial management system to India.
Lastly, Sitharaman mentioned that a tax deduction at source (TDS) of 1% will be taken to purposely track crypto investment in India.