India’s central bank, the Reserve Bank of India (RBI), has dismissed all speculation that the government is planning to issue a cryptocurrency that will be regulated by the RBI, instead viewing CBDCs as the digital equivalent of the rupee. Used to be.
Pankaj Choudhary, Indian Minister of State in the Ministry of Finance, made the statement in response to a direct inquiry from the Rajya Sabha, the upper house of India’s Parliament, regarding the central bank’s RBI cryptocurrency project.
When Rajya Sabha member Sanjay Singh was asked “is it true that” [the] The government is planning to introduce a cryptocurrency that will be controlled by the Reserve Bank of India,” Chowdhury replied, “No sir.”
However, he pointed to India’s planned central bank digital currency (CBDC), which is a digital representation of traditional paper currency – in this case, the rupee.
Can CBDC Transform India’s Digital Economy?
Last week, Finance Minister Nirmala Sitharaman told participants at the India Global Forum event that the RBI would launch a CBDC within the year after consultation with the government.
He added that the Digital Rupee offers several advantages:
“In this day and age, wholesale payments are happening between countries, large transactions between institutions, large transactions between central banks of each country are better enabled with digital currency. So we think RBI would like to see that how they can present it better.
During the legislative hearing, Choudhary replied in the affirmative when Singh further asked whether the administration was aware that digital assets are “irregular and free from government interference.”
“Currently, cryptocurrencies are unregulated in India,” the official told the parliamentarians.
Speaking about the difference between RBI digital currency and traditional paper currency, Singh asked the minister to provide details about the CBDC and its planned release this year:
“RBI does not issue a cryptocurrency. Traditional paper currency is a legal tender and is issued by RBI in accordance with the provisions of the RBI Act, 1994. A digital version of traditional paper currency is called a central bank digital currency (CBDC),” replied Minister Chowdhury.
Cryptocurrency remains unregulated
On Wednesday, Indian crypto supporters asked members of parliament to provide clarity on the proposed crypto bill, as the passage of the law was delayed twice.
India is proposing a 30% tax on income from the sale of cryptocurrencies and other digital assets as of February 1, 2022. Additionally, a source-based tax (TDS) was introduced on payments made to transfer digital assets at 1%.
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