Key Points
- India is set to launch a digital currency backed by the Reserve Bank of India (RBI).
- The move intends to make transactions quicker, safer, and more transparent.
India is planning to introduce its own digital currency, guaranteed by the Reserve Bank of India (RBI), similar to regular currency.
This effort is a part of India’s increasing emphasis on incorporating blockchain technology into its financial system.
Enhancing Transaction Processes
The Union Minister of Commerce and Industry, Piyush Goyal, stated that the initiative aims to accelerate transactions while ensuring safety and transparency.
He further explained that the system, akin to stablecoins regulated under the GENIUS Act in the US, will function under full government support.
Goyal also mentioned that every transaction under this new digital currency would be verifiable, thus limiting the scope for illegal or untraceable transfers.
Despite being a highly crypto-active nation, India’s government and central bank have expressed concerns about privately issued digital currencies like Bitcoin.
“We have not been encouraging cryptocurrency, which does not have sovereign backing or which is not backed by assets,” Goyal stressed.
India’s Stance on Cryptocurrency
The RBI has consistently cautioned about the dangers that unregulated digital assets pose to the financial system, highlighting risks to investor safety.
It continues to support a complete ban on private cryptocurrencies, promoting its own Central Bank Digital Currency (CBDC) as a regulated alternative.
Recently, India has stepped up its crackdown on crypto activities, even without a comprehensive regulatory framework.
A Reuters report revealed that India’s regulators are apprehensive that legitimizing crypto could make it systemic and more challenging to control.
Consequently, the government has no immediate plans to regulate the crypto sector. Instead, the use of crypto remains confined within strict tax and anti–money laundering measures.
Profits from trading or transferring crypto are taxed at a flat 30%, with a 1% TDS on transactions over specific thresholds. Furthermore, investors cannot offset crypto losses against other income.
In this tightening environment, several Indian users have reported bank account freezes linked to peer-to-peer (P2P) crypto transactions flagged in ongoing investigations.
