The central bank of India will issue a digital version of its rupee in the fiscal year 2022-2023 financial year, which begins on Apr. 1., according to the country’s finance minister on Tuesday.
“Introduction of a central bank digital currency will give a boost, a big boost to the digital economy,” Nirmala Sitharaman said as she delivered the country’s annual budget.
“Digital currency will also lead to a more efficient and cheaper currency management system.”
Sitharaman provided no information about how the digital rupee would function or look like but stated that it would be implemented “using blockchain and other technologies.” Moreover, he said that revenue from the transfer of virtual digital assets should be taxed at a rate of 30%.
If its intentions are carried out, India will be one of the world’s major economies to launch a so-called central bank digital currency (CBDC).
China has been working on a digital version of the yuan since 2014, and it is the country with the most experience in establishing CBDCs internationally.
Over the last two years, the People’s Bank of China has conducted trials in the form of lotteries, in which digital yuan has been distributed to individuals in certain cities for them to spend. Recently, the central bank has attempted to broaden the usage of the digital yuan. However, China has not yet introduced its digital currency on a national scale, and there is no timetable for doing so.
Japan is also considering its own CBDC, and the U.S. The Federal Reserve launched a study on a digital dollar last month but did not commit to issuing one.
While India is moving forward with a digital currency, it has taken a harsher stance on cryptocurrencies like bitcoin and is now working on sector regulation.