India Plans RBI-Backed Digital Currency for Enhanced Transaction Safety
India is set to launch its own digital currency with backing from the Reserve Bank of India (RBI), aiming to enhance transaction speed, security, and transparency. Union Minister Piyush Goyal announced this initiative, aligning it with efforts to incorporate blockchain technology into India's financial system.
- The digital currency will function similarly to stablecoins regulated under the US GENIUS Act, with full government support.
- Every transaction will be verifiable, aiming to eliminate illegal transfers.
Despite being active in the crypto space, India remains cautious about private cryptocurrencies like Bitcoin. The government prefers a Central Bank Digital Currency (CBDC) as a safer alternative.
India’s Crypto Oversight
- The RBI warns against unregulated digital assets due to investor risk and advocates for a ban on private cryptocurrencies.
- India lacks a comprehensive crypto regulatory framework but enforces strict tax and anti-money laundering measures.
- Crypto profits are taxed at 30%, with a 1% TDS on sizeable transactions, and losses cannot offset other income.
Recent crackdowns have led to bank account freezes related to peer-to-peer crypto transactions under investigation.