India's Finance Minister Says Central Bank to Launch Digital Cryptocurrency
FILE PHOTO: A security guard's reflection is seen next to the logo of the Reserve Bank Of India (RBI) at the RBI headquarters in Mumbai, India, June 6, 2019. REUTERS/Francis Mascarenhas India’s finance minister on Tuesday said the central bank will introduce a digital currency in the next financial year using blockchain and other supporting technology.
“Introduction of a central bank digital currency will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,” Nirmala Sitharaman said on Tuesday while presenting the federal budget.
India’s central bank has voiced “serious concerns” around private cryptocurrencies on the grounds that these may cause financial instability.
The Indian government has also decided to levy 30 percent tax, the highest tax band in the country, on income arising out of digital assets, Sitharaman said.
However, losses from sale of digital assets cannot be offset against other income, she added.
Industry estimates suggest there are 15 million to 20 million crypto investors in India, with total crypto holdings of around 400 billion rupees ($5.37 billion). No official data is available on the size of the Indian crypto market.
New Delhi has been mulling tough regulations around digital currencies in India for several months.
($1 = 74.5400 Indian rupees)
MUMBAI (Reuters)