India has been avoidant to cryptocurrencies, but the high interest and global adoption of crypto influenced the change in India’s stance. The country announced plans to introduce its national cryptocurrency before April 2023 and legalized cryptocurrency by applying a 30% tax on sales of digital assets.
The country’s central bank, the Reserve Bank of India (RBI), is implementing Indian central bank digital currency (CBDC). Digital currency will lead to a more efficient and cheaper currency management system, Financial Minister of India Nirmala Sitharaman stated.
CBDC differs from decentralized cryptocurrencies, which don’t have the legal tender status. Yet the digital rupee will allow users to make domestic and international transactions without a third party or bank interference.
India also imposed a 30% tax on both, cryptocurrency and NFT proceedings.
“There’s been a phenomenal increase in transaction in virtual digital assets. The magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime,”
On the Flipside
- Thirty percent tax is indeed high. Nevertheless, Avinash Shekhar, the chief executive of a cryptocurrency exchange ZebPay, said it’s “a positive step as it legitimizes crypto and hints at an optimistic sentiment towards further acceptance of crypto and NFTs.”
- According to Reuters, India’s central bank is concerned about private crypto assets and said that these could cause financial instability.