Union Budget 2022: Digital Rupee Using Blockchain Technology to Be Launched by RBI in 2022-23

Central Bank Digital Currency or CBDC is aimed at boosting India’s overall economy, Nirmala Sitharaman said in her Budget speech.

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By Radhika Parashar | Updated: 1 February 2022 13:29 IST
Highlights
  • Crypto sector not banned in India
  • India to get national digital currency
  • Tax of 30 percent on crypto-based incomes announced

Nirmala Sitharaman did not give elaborate details on the upcoming Digital Rupee

Photo Credit: Reuters

Finance Minister Nirmala Sitharaman presented the Union Budget for the fiscal year of 2022 on Tuesday, February 1. As part of her presentation, Sitharaman announced that India will get its Central Bank Digital Currency (CBDC) this year, which will be regulated by the Reserve Bank of India (RBI). Essentially, the finance minister has announced a Digital Rupee for India supported by blockchain technology, which is also the foundation of cryptocurrencies.

“This will give a boost to the economy,” Sitharaman said.

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The development has stirred excitement as well as some concerns among Indians.

Interestingly, the topic around the ban of cryptocurrencies was left out from the list of tech-related announcements addressed by the Finance Minister.

Indian crypto investors can heave a sigh of relief now that the ban on the crypto sector did not make it to the annual budget speech.

In fact, a lecture on “Understanding Cryptocurrency and Its Impact on Indian Economy” has been added to the agenda for the Lok Sabha or the Lower House of the Parliament to educate lawmakers on the nuances of the crypto space.

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The lecture has been slated by the Parliamentary Research and Training Institute for Democracies department for February 2 in both online as well as offline modes.

For now, India's stance on crypto regulation remains undisclosed.

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Sitharaman, however, did declare a 30 percent tax on crypto-based incomes.

“I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 percent. No deduction in respect of any expenditure or allowance shall be allowed while computing such income, except cost of acquisition,” she said.

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In November last year, a crypto bill proposing a ban on private cryptocurrencies was supposed to be tabled before the Parliament during its winter session, but that did not happen.

At the time, Sitharaman had revealed at the time that the bill was awaiting an approval from the Cabinet, the status of which has not changed since.

The same bill had also mentioned plans of rolling out a national digital currency regulated by the RBI.


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