Budget 2022 and the future of cryptocurrency in India

Budget 2022 and the future of cryptocurrency in India
Budget

Budget 2022 and the future of cryptocurrency in India

Union Finance Minister Nirmala Sitharaman had removed uncertainty over the future of cryptocurrency in India through her Budget speech. India will soon join a handful of nations to launch its own blockchain currency.  

In this, she announced that the Reserve Bank of India (RBI) will launch its digital currency in this financial year. The Budget also announces a levy of 30% of the income from the transfer of all virtual assets. Through this step, the uncertainty of lakhs of crypto investors was solved. Through this announcement, the taxation of virtual assets is now clearly defined. 

The union government bring the crypto under the tax ambit. Crypto is officially recognised and investors will be paying taxes on the income arising from the sale of the digital assets. Even though millions of Indians have already invested lakhs of rupees in digital currency,  there is no law regulating virtual currencies till now. There is a phenomenal increase in transactions in virtual digital assets in India, this is the main reason why the government made a specific tax regime.

At present, the government is preparing legislation to regulate the use of cryptocurrencies in the country. Meanwhile, a new digital rupee powered by blockchain technology will be issued by the RBI in the 2022-23 financial year. It is considered that Digital currency leads to a more efficient and cheaper currency management system. 

The Central Bank Digital Currency (CBDC) is a digital form of fiat currency that can be transacted using wallets backed by the blockchain and is regulated by the central bank. India will now join a handful of nations to launch its own blockchain currency. Not even the United States has launched their CBC yet.

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