India is the latest country to introduce its own digital currency. The Reserve Bank of India plans to launch a digital rupee in the next financial year, which begins on April 1.
“Introduction of a central bank digital currency will give a boost, a big boost to the digital economy,” India's finance minister, Nirmala Sitharaman, said while discussing the country's annual budget. “Digital currency will also lead to a more efficient and cheaper currency management system.”
The country is looking to impose strict regulations on crypto if the plan follows through. India would also become one of the biggest economies to roll out a CBDC, according to CNBC. Sitharaman did not give additional details about the plan, except that a digital rupee would launch using "blockchain and other technologies," and income from digital assets would be taxed 30%.
The Atlantic Council's CBDC Tracker has identified at least 87 countries looking into the creation of a digital currency, and nine have already launched one. The Bank of Korea most recently wrapped up its first phase of testing a digital won, and China's introduction of a digital yuan is well underway. The Federal Reserve is also weighing a digital dollar, but officials are soliciting feedback from the public first.
Crypto traders like CoinDCX CEO Sumit Gupta are a fan of India's announcement, but Gupta thinks taxing digital asset income 30% would be too high. "A tax rate of 30% is on par with that imposed on gains from speculative activities like lottery, gambling and other gaming activities," he told BBC.