India To Legalise Crypto As Digital Rupee Is On The Making

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India adds to the list of countries making its own cryptocurrency to fight the rapid growth of other decentralized currencies around the world. Nirmala Sitharaman, the finance minister of the country, said that the country is ready to present its digital rupee by the end of this year itself but the catch is that the digital currency will be taxed at the highest tax bracket at 30%.

The country will consider profits from crypto transactions and NFT transactions under this tax band. “Introduction of a central bank digital currency will give a boost, a big boost to (the) digital economy. Digital currency will also lead to a more efficient and cheaper currency management system,” Sitharaman said on Tuesday.

The gift items which will include crypto transactions will also bear a 1% levy that will be paid by the receiver. “The government will also track the money trail in crypto deals and every transaction will have 1% TDS imposed,” Sitharaman said.

The digital rupee is going to be introduced by the Central Bank in the next financial year, created using blockchain and other advanced technologies at play. Reuters believes that there are 15 million to 20 million crypto users in the country making the industry worth $5.37 billion.

India, in this matter, joins China, as both the countries decided to ban the digital currencies at first but then took a less radical approach later. Back in November, India banned crypto in the country with Prime Minister Narendra Modi calling digital currencies posing “serious concerns on macroeconomic and financial stability.” However, later on the government took the consensus that the currency should be regulated and not banned.

However, the implementation of the new currency has made waves across the web. Sumit Gupta, co-founder, and CEO of cryptocurrency exchange CoinDCX, a company based in India, told the BBC, “A tax rate of 30% is on par with that imposed on gains from speculative activities like lottery, gambling and other gaming activities. That proposed 30% might act as a dampener for greater adoption.”

While the tax rate is high, the crypto enthusiasts believe that the acceptance of the currency despite the Reserve Bank of India’s dislike is going to boost the crypto industry in the country.

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