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Crypto is back on the discussion table as <a href="https://www.businessinsider.in/cryptocurrency/news/taxing-cryptocurrencies-does-not-give-them-legal-status-clarifies-indias-finance-minister/articleshow/89500097.cms" data-type="tilCustomLink">Finance Minister Nirmala Sitharaman </a>and Reserve Bank of India (RBI) Governor Shaktikanta Das deliberated over the issue. The Finance Minister had announced in her Budget speech that the RBI will launch a <a href="https://www.businessinsider.in/cryptocurrency/news/taxes-gst-and-the-digital-rupee-crypto-policy-in-india-is-going-through-a-big-overhaul/slidelist/89499051.cms" data-type="tilCustomLink">block chain based digital currency </a>next year. The government also proposed to tax digital assets. "With RBI &amp; Ministry, not just on crypto but on every other thing as well, I think there's complete harmony with which we're working, respecting each other's domain and also knowing what we've to do with each other's priorities &amp; in the interest of the nation. There's no turfing here," said Sitharaman after the meeting. <cmsannotation type="cmsannotation" annotationid="wazirx" comment="wazirx" text="wazirx">wazirx</cmsannotation> "Like several other issues, this particular issue is internally under discussion b/w RBI &amp; the Govt. Whatever points we have, we discussed with the Govt. Beyond that I think I will not like to further elaborate," said Das. RBI Governor Shaktikanta Das had cushioned crypto investors just few days back saying "it is my duty to tell the investors who invest in cryptocurrencies to keep in mind that they are investing at their own risk and also need to keep in mind that the cryptocurrency has no underlying value, not even a tulip". "Yes, the issue that was discussed between the Finance Minister and the RBI governor along with other issues and there's no difference of views on any of these, informed a Finance Ministry official requesting anonymity.

RBI, government working in complete harmony on crypto: Nirmala Sitharaman

<ul class="summary-list"><li>The <keyword id="6354335" type="ORGANIZATION" weightage="60" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> on Thursday said it is considering a "phased" rollout of a <keyword id="6472011" type="UNKNOWN" weightage="60" keywordseo="Central-Bank-Digital-Currency">central bank digital currency</keyword>.</li><li>Deputy Governor T. Rabi Sankar said a <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="CBDC">CBDC</keyword> will protect citizens from the volatility of cryptocurrencies, <a href="https://www.bloomberg.com/news/articles/2021-07-22/india-eyeing-phased-roll-out-of-central-bank-digital-currency">Bloomberg</a> reported.</li><li>But Sankar added that a launch will need to overcome some legal hurdles first.</li></ul>The Reserve Bank of India on Thursday said it is considering a "phased" rollout of a central bank digital currency.Deputy Governor T. Rabi Sankar during a speech said politicians are eyeing a CBDC to protect citizens from the volatility of cryptocurrencies, <a href="https://www.bloomberg.com/news/articles/2021-07-22/india-eyeing-phased-roll-out-of-central-bank-digital-currency">Bloomberg</a> first reported.A digital currency, he said, will also decrease cash usage in India's economy, especially as more consumers adopted offerings like <a href="https://e.insiderintelligence.com/click/23223491.4/aHR0cHM6Ly9jb250ZW50LW5hMS5lbWFya2V0ZXIuY29tL2dsb2JhbC1jYXNoLXVzYWdlLWV4cGVjdGVkLWRyb3Atb2ZmLXNoYXJwbHktbmV4dC0zLXllYXJzLWhlcmUtcy13aGF0LXRoYXQtbWVhbnMtbW9iaWxlLXdhbGxldHMtY2FyZHMtYWNyb3NzLWdsb2Jl/5d233c18f730436f2414784fBcece84c2" target="_blank" rel="noopener">contactless payments</a> during the pandemic."Central banks have increased their attention on digital currencies," Sankar said.A CBDC is a type of central bank liability issued in digital form, which could be used by the general public.Sankar added that an introduction of a CBDC will need to overcome some legal hurdles in foreign exchange rules and information-technology laws.In the US, Federal Reserve <keyword id="1727754" type="PERSON" weightage="60" keywordseo="Jerome-Powell">Jerome Powell</keyword> <a href="https://markets.businessinsider.com/currencies/news/jerome-powell-cryptocurrencies-cbdc-stablecoins-digital-currency-testimony-2021-7">questioned</a> the necessity of cryptocurrencies once the Fed rolls out its own CBDC.Powell in <a href="https://markets.businessinsider.com/currencies/news/federal-reserve-central-bank-digital-currency-cbdc-research-report-summer-2021-5?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">May</a> revealed that the central bank has taken further steps in exploring a digital currency and will be releasing a discussion paper this summer outlining its thinking on digital payments. Apart from the US, a <a href="https://markets.businessinsider.com/news/stocks/fed-boston-president-rosengren-cbdc-central-bank-digital-currency-launch-2021-5-1030422818?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">number of central banks</a> have been exploring CBDCs, spurred by strong momentum in the cryptocurrency space. China has been leading the government-backed digital currency race since developing its CBDC in 2014 and testing a pilot program in 2020. The statement from the Indian deputy governor follows the European Commission's proposal to <a href="https://markets.businessinsider.com/currencies/news/european-union-ban-anonymous-cryptocurrency-counter-money-laundering-terrorism-financing-2021-7">ban anonymous cryptocurrency transactions</a> as the bloc seeks to clamp down on money laundering and terrorism financing.The Indian government, for its part, has been eyeing cryptocurrency regulation for some time in a bid to prevent terrorism financing and money laundering. A CBDC will remove a certain level of anonymity cryptocurrencies ar known for.

India is considering a phased roll-out of a central bank digital currency

<ul class="summary-list"><li>India may start a pilot program for a digital currency in December, the head of the Reserve Bank of India told CNBC. </li><li>RBI Governor Das said testing will include scrutiny on security and the impact on monetary policy. </li><li>The majority of the world's central banks are studying the usage of central bank digital currencies, or CBDCs. </li></ul>India may be ready to test a digital rupee as 2021 comes to a close, the head of the Reserve Bank of India told CNBC, underscoring interest among central banks worldwide to experiment with or fully launch digitized currencies. The RBI is on track by at least December to begin a pilot program for a central bank digital currency, or CBDC, RBI Governor Shaktikanta Das said in a pre-recorded Thursday <a href="https://www.cnbc.com/2021/08/27/india-central-bank-rbi-digital-rupee-trials-could-begin-by-december.html">interview with CNBC.</a>"We are being extremely careful about it because it's completely a new product, not just for RBI, but globally," Das said. The security of a digital rupee is a top priority in studying various aspects of operating such an asset, he said. "The possibility of cloning ... should be avoided." The RBI will also examine the impact a CBDC will have on the financial sector, monetary policy and on currency in circulation, and it will assess technological issues. The potential testing at the RBI highlights that five countries have fully launched a digital currency, according to <a href="https://www.atlanticcouncil.org/cbdctracker/">think tank Atlantic Council</a>, with the Bahamian Sand Dollar the first one to become widely available, and 14 other countries are in the pilot stage with CBDCs.86% of central banks are exploring central bank digital currencies, according to a survey by the <a href="https://www.bis.org/publ/bppdf/bispap114.pdf">Bank for International Settlements</a> published in 2020. Federal Reserve Chairman Jerome Powell has said a research paper on whether the Fed should establish a digital currency will likely be published in September.El Salvador thrust itself into the spotlight surrounding digital currencies <a href="https://markets.businessinsider.com/currencies/news/el-salvador-bitcoin-adoption-poses-network-challenges-blockchain-jpmorgan-2021-7">in becoming the first country to adopt bitcoin as legal tender</a>, with usage set to launch on September 7. The country is <a href="https://markets.businessinsider.com/news/currencies/el-salvador-bitcoin-cryptocurrency-200-atms-50-branches-adoption-chivo-2021-8">installing 200 bitcoin ATMs</a> ahead of the launch and these will work alongside the government's cryptocurrency app called Chivo.The <a href="https://markets.businessinsider.com/news/stocks/imf-international-monetary-fund-risk-el-salvador-bitcoin-legal-tender-2021-6?utm_source=markets&amp;utm_medium=ingestgest">International Monetary Fund</a> is among the entities to raise concerns about the country's bitcoin adoption. Fitch Ratings this month said the move poses a serious credit <a href="https://www.businessinsider.com/el-salvador-bitcoin-fitch-crypto-insurers-legal-tender-nayib-bukele-2021-08?amp">risk to its local insurance companies. </a>In Venezuela, the central bank <a href="https://www.businessinsider.in/cryptocurrency/news/venezuela-announces-its-own-central-bank-digital-currency/articleshow/85097126.cms">plans to launch a digital bolivar</a> and plans to redenominate its currency in October.

India could begin testing a digital currency in December, says the country's central bank chief

<ul class="summary-list"><li>The Indian government will roll out a digital currency over the coming year, the finance minister said. </li><li>India previously suggested banning <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword>, but now plans to regulate and <keyword id="12148805" type="UNKNOWN" weightage="60" keywordseo="tax" source="Orion">tax</keyword> it, the minister said.</li><li>India is a major digital trading hub, with an estimated 15 to 20 million crypto investors.</li></ul>India appears to be warming up to cryptocurrencies, with an announcement by the finance minister on Tuesday of plans for a digital currency rolled out by the central bank, along with a framework to regulate and tax crypto assets.Finance minister Nirmala Sitharaman, as part of her annual budget speech, said the central bank would aim to roll out a digital rupee in the coming fiscal year. This marks a major U-turn for the government, which had signaled it <a href="https://www.businessinsider.com/crypto-investing-india-ban-bitcoin-retail-investors-kimchi-premium-cbdc-2021-11?utm_medium=ingest&amp;utm_source=markets&amp;r=US&amp;IR=T">could ban cryptocurrencies</a> outright, until the upper house of parliament <a href="https://markets.businessinsider.com/news/currencies/crypto-ban-india-regulate-bill-fines-sebi-cryptocurrency-digital-asset-2021-12">clarified</a> that digital assets should be kept on exchanges and monitored correctly by a market regulator."The introduction of a central bank digital currency will give a big boost to the digital economy. Digital currency will also lead to a more efficient and cheaper currency management system," Sitharaman said.According to its budget plans, the government will impose a 30% tax on income from cryptocurrencies and other digital assets, as well as apply a 1% tax deduction at source on payments related to purchasing such assets.Central bank digital currencies (CBDCs) offer a centralized, official alternative to pure cryptocurrencies. Major central banks, such as the Federal Reserve, the Bank of England and the European Central Bank are all looking into developing their own digital currencies.But it is the emerging economies where progress is actually happening. China already has a <a href="https://markets.businessinsider.com/news/currencies/china-digital-yuan-years-ahead-in-development-cbdc-cryptocurrencies-chainalysis-2021-8">digital yuan</a> in circulation through various pilot programs, putting it several years ahead of G7 central banks in this respect. The effect of India creating an official digital currency, along with a framework for crypto trading and investment could be significant. The <a href="https://blog.chainalysis.com/reports/2021-global-crypto-adoption-index/">2021 Global Crypto Market Adoption Index</a> from <keyword id="11902141" type="UNKNOWN" weightage="60" keywordseo="chainalysis" source="Orion">Chainalysis</keyword> <a href="https://markets.businessinsider.com/news/currencies/asia-global-cryptocurrency-adoption-retail-investors-india-pakistan-vietnam-2021-8">showed</a> Asia is leading the way in global crypto adoption and India is second only to Vietnam. It is estimated that there are between 15 and 20 million <keyword id="11892695" type="UNKNOWN" weightage="60" keywordseo="cryptocurrency" source="Orion">cryptocurrency</keyword> investors in the country.Cryptocurrency <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword> were up slightly on Tuesday, gaining some respite from the almost-unbroken pressure during January, when investors booked profits on some of 2021's big winners. <a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> and <a href="https://markets.businessinsider.com/currencies/eth-usd">ether</a> posted gains of 4% and 9% over the past 24 hours respectively, according to CoinMarketCap. Read more: <a href="https://www.businessinsider.com/bitcoin-price-bear-market-bull-run-experts-reveal-things-watch-2022-1?r=US&amp;IR=T" target="_blank" rel="noopener noreferrer">'Hodlers' last stand': Crypto experts at a major exchange say bitcoin and ethereum can still avoid a bear market. Here are the 4 key things they say you need to watch to figure out what's next</a>

India will launch a digital rupee in the next year and plans a 30% tax on crypto-related income, according to the finance minister

<ul><li>Facebook has confirmed that their new cryptocurrency, Libra, won’t be coming to India. </li><li>Reserve Bank of India (RBI) banned dealing in cryptocurrency and proposed a law which could lead to 10 years in jail if its guidelines are violated. </li><li>Facebook’s spokesperson told <a href="https://www.bloomberg.com/news/articles/2019-07-09/facebook-has-no-india-plans-for-calibra-wallet-cryptocurrency">Bloomberg</a> that they will continue to work with the Indian government to see if the current mandate be updated. </li></ul>Facebook has confirmed that its new cryptocurrency, Libra, won’t be making its way to India. The social networking giant has said that unless the country’s Central Bank, the Reserve Bank of India (RBI), changes its policies, Libra and Calibra’s digital wallet services won’t be launching in the country. “There are no plans to offer Calibra in India,” a Facebook spokesman told <a href="https://www.bloomberg.com/news/articles/2019-07-09/facebook-has-no-india-plans-for-calibra-wallet-cryptocurrency">Bloomberg</a>, “As you may know, there are local restrictions within India that made a launch of Calibra not possible at this time.” It could be a big blow to Facebook’s plans for its cryptocurrency. According to <a href="https://www.bloomberg.com/news/articles/2019-06-20/-mushrooming-india-growth-potential-driver-for-facebook-s-libra">Jefferies Financial Group</a>, Libra was counting on emerging markets like India for explosive growth, where Facebook already has over 310 million users. RBI vs Facebook The RBI came down hard on cryptocurrencies last year when it banned its use, and told banks to disassociate themselves from cryptocurrency exchanges. Last month, the RBI proposed a <a href="https://economictimes.indiatimes.com/news/economy/finance/draft-law-proposes-10-year-jail-term-for-dealing-in-cryptocurrency/articleshow/69693984.cms">new draft law</a> — Banning of Cryptocurrency and Regulation of Official <keyword id="1624829" type="PERSON" weightage="20" keywordseo="digital-currency">Digital Currency</keyword> Bill 2019 — which proposes jail time of up to 10 years if anyone is found dealing in cryptocurrency. The government is also reportedly working on launching its own cryptocurrency, backed by the state, to counter the prevalence of digital currencies. Subhash Garg, India’s economic affairs secretary, <a href="https://www.bloomberg.com/news/articles/2019-07-08/facebook-s-libra-currency-faces-skeptical-government-in-india">reacted</a> to Facebook’s white paper on Calibra saying that the government would not be ‘comfortable’ with the launch of Calibra in India, especially since its a ‘private’ cryptocurrency. But Facebook isn’t giving that easy. Alexandru Voica, Facebook’s representative in London, told <a href="https://www.bloomberg.com/news/articles/2019-07-09/facebook-has-no-india-plans-for-calibra-wallet-cryptocurrency">Bloomberg</a> that the company is still working with regulators to see if India’s policy for cryptocurrencies can be updated.

Facebook has confirmed that Libra isn’t coming to India as government shies away from ‘private’ cryptocurrencies

<ul class="summary-list"><li>Central banks will begin to diverge in their use of technology in 2024, the Atlantic Council said.</li><li>The US risks falling behind the EU, India, and China in the digital currency race.</li></ul>The US dollar has long been the <a href="https://www.businessinsider.com/us-dollar-war-global-fight-america-economy-dominance-reserve-currency-2023-7">dominant currency of the world</a>, but that doesn't guarantee the same will hold true as money turns increasingly digital. To Atlantic Council researchers Josh Lipsky and Ananya Kumar, the Federal Reserve is already falling behind in the technology race.Unlike the US, other world powers including China, India, Germany, Italy, and France have moved beyond the theoretical stage for central bank digital currencies (CBDC)."A lot of central banks are investing heavily in innovation, some of the largest central banks in the world, but the US position has been much more cautious on this," Lipsky told Business Insider in an interview. "But there is a risk here of falling behind, that would mean there's less US input in standard setting."Lipsky, who is the senior director of the Atlantic Council's GeoEconomics Center, said central banks around the globe are working to "future-proof" their currencies as blockchain technology, artificial intelligence, and quantum computing become more relevant — all of which, for better or worse, are poised to impact how people use money on a daily basis.India, for one, has scaled up its digital rupee project to more than one million transactions per day processed by commercial banks, and China has been <a href="https://markets.businessinsider.com/news/currencies/dollar-vs-yuan-race-china-us-central-bank-digital-currency-2022-4">running pilot tests with the eYuan</a> for several years. The European Central Bank, meanwhile, has various benchmarks for 2024 to test the digital euro with multiple member nations. The Atlantic Council further illustrated the point by noting the People's Bank of China deploys more than 300 people to its digital currency project, while the Fed commits fewer than 20.In Lipsky's view, it's a miscalculation on the part of US policymakers to forgo paving the way in these advancements."The Fed is not bringing technological solutions to the table," he said. "The miscalculation is thinking the dollar is the world's reserve currency, so there's not a need to innovate. I see that as a defensive posture, rather than a proactive one."To be sure, the US has deployed its long-awaited <a href="https://www.wsj.com/articles/pro-take-fednow-price-tag-is-more-than-half-a-billion-dollars-f103733e" target="_blank" rel="noopener">FedNow</a> program, an interbank settlement system. But even that took years longer than similar projects overseas, and has debuted to limited fanfare. Experts warn it could take years more to become widely adopted. <h3>A fractured future of money</h3>New alternative financial systems are springing up across the world, including in China, that allow efficient cross-border transactions, though the US hasn't emerged as a key player in the space, let alone a leader. These projects take time to build and implement, Lipsky said, but once activated, the innovation and progress could be extremely quick.If the US doesn't emerge as an innovator, the Fed and US dollar could see its standing on the world stage diminish via trade, reserves, and sanctions strength, according to the Atlantic Council."The end-result of less Fed engagement here will be a fractured payment landscape," Lipsky said. "Different models will proliferate from different countries, and that will create more friction. You could have a system that is less efficient and less secure. There won't be a unification of the payment system globally, and that's a US disadvantage."

The Fed's lack of innovation with the dollar means China, India, and others will dominate the digital currency race

<ul><li>Bengaluru-based Wipro has developed a blockchain-based solution for banks in Thailand.</li><li>Wipro had partnered with R3, an international consortium working on <keyword id="6357624" type="UNKNOWN" weightage="20" keywordseo="blockchain-technology">blockchain technology</keyword>.</li><li>This will allow Thailand's banks to settle dues with each other through de-centralised digital currency.</li><li>The solution was developed for Thailand's central bank and a consortium of 8 commercial banks. </li></ul>An Indian technology major, Wipro, is now helping eight banks in Thailand to settle dues with each other through de-centralised digital currency. "Developed as part of the first phase of Project lnthanon, the solution will enable de-centralised interbank real-time gross settlement (RTGS) using wholesale Central Bank Digital Currency (CBDC) to prove that the technology can perform key functionalities of payment and enhance efficiency," Wipro's statement on May 7 said. Project lnthanon is an initiative led by the <keyword id="338583" type="ORGANIZATION" weightage="20" keywordseo="Bank-of-Thailand">Bank of Thailand</keyword>, launched in August 2018. The first phase focussed on rolling out a payment infrastructure, followed by the blockchain initiatives. " The prototype has demonstrated the merits of blockchain technology adoption for making interbank payments more efficient," Krishnakumar N Menon, Vice President and Blockchain Theme Leader, Wipro said. In April 2018, the Reserve Bank of India revealed its plan to issue a digital currency, CBDC, while forcing a bunch of cryptocurrency exchanges operating in the country to shut shop. However, the <a href="https://www.thehindubusinessline.com/money-and-banking/rbi-shelves-plan-to-launch-digital-currency/article25883102.ece" data-type="tilCustomLink" target="_blank">plan was shelved</a> after three-month long feasibility study; the findings have not been made public. CBDC is digital money equivalent to – and redeemable for – a country's domestic currency that a central bank can issue. It can choose to simultaneously remove an equivalent amount of physical currency from the system. There are at least 40 countries, including Singapore, UK, France, Sweden, and Cambodia, where the central banks are working on blockchain technology with various goals, not just digital currencies, according to <a href="https://www.weforum.org/press/2019/04/central-banks-becoming-leaders-in-blockchain-experimentation-says-world-economic-forum/" data-type="tilCustomLink" target="_blank">a recent report from the World Economic Forum</a>. "Blockchain technology could enable new capabilities for central bank processes that have not yet been identified," the report had said. SEE ALSO: <a href="https://www.businessinsider.in/Blockchain-could-soon-power-stock-markets-music-sales-and-even-prevent-child-labor-heres-how-it-works/articleshow/54881954.cms" data-type="tilCustomLink" target="_blank">What is Blockchain?</a> <a href="https://www.businessinsider.in/microsoft-is-partnering-with-jpmorgan-chase-on-its-blockchain-product/articleshow/69153485.cms" data-type="tilCustomLink" target="_blank">Microsoft is partnering with JPMorgan Chase on its blockchain product</a>

An Indian tech major is helping Thai banks use digital currency while the RBI hangs back

<ul><li>The <keyword id="6557524" type="ORGANIZATION" weightage="20" keywordseo="central-board-for-indirect-taxes-and-customs">Central Board for Indirect Taxes and Customs</keyword> is proposing to tax earnings from cryptocurrency transactions at 18%. </li><li>Under the regulator’s proposal cryptocurrencies are to be designated as “intangible goods”. </li><li>This should a welcome relief for <keyword id="6354947" type="UNKNOWN" weightage="20" keywordseo="bitcoin">Bitcoin</keyword> traders and miners. By bringing digital currencies into the tax net, the government is legitimising trade in them. </li></ul>After months of confusion over their legal status, it seems the Indian government is planning to regulate the trading of digital currencies like Bitcoin and Ethereum under the Goods and Services Tax (GST) regime. The logic is simple - if people are making money from it, it is a taxable event. Anonymous sources told Bloomberg that profits from digital currency transactions could soon fall <a href="https://www.bloombergquint.com/gst/2018/05/23/india-mulls-gst-on-trading-of-virtual-currencies#gs.aaNCbqA">under the 18% tax slab</a> - the same rate as software and electrical devices - if the Central Board for Indirect Taxes and Customs (CBITC) has its way. This is a little less than the tax rate in the US, where traders are expected to pay 20% on their earnings if they’ve held their digital currency for longer than a year. Barring the tax level, details on how the trade of these currencies would be regulated in India weren’t revealed. And there is no clarity on their status as legal tender. However, the CBITC’s draft framework contained a number of key proposals. Firstly, cryptocurrencies are to be designated as “intangible goods” while the processes involving their mining, storage and transfer will be designated “services”. As a result, cryptocurrency exchanges will have to pay taxes on commissions earned. Secondly, the value of a cryptocurrency will primarily be denominated in rupees. Thirdly, transactions that involve a party outside India will designated as imports in the case of a purchase and exports in case of a sale. Finally, trading profits could be liable for retrospective <keyword id="6383566" type="UNKNOWN" weightage="20" keywordseo="taxation">taxation</keyword> from the date of the GST’s implementation - July 1st, 2017. This could result in quite a revenue haul for the government. In January, Reuters reported that trading volumes in India were increasing by about <a href="https://www.reuters.com/article/us-markets-bitcoin-india-taxes/india-sends-tax-notices-to-cryptocurrency-investors-as-trading-hits-3-5-billion-idUSKBN1F8190?utm_campaign=trueAnthem:+Trending+Content&amp;utm_content=5a63607f04d3013aee752148&amp;utm_medium=trueAnthem&amp;utm_source=twitter">₹20 billion every month.</a> A step in the right direction The news is likely a welcome relief for Bitcoin traders and miners. By bringing digital currencies into the tax net, the government is legitimising trade in them. It could also encourage more people to take part in the trading of these currencies. The next step after taxation, however, is preventing the misuse of digital currencies and tax evasion. Last month, the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> cracked down on cryptocurrency transactions, <a href="https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR264270719E5CB28249D7BCE07C5B3196C904.PDF">barring any regulated entities like banks from facilitating them</a> after three months. The move was in response to concerns that money was being laundered through digital currency trades and the profits from such trades could be used to finance illegal activities. The order is currently <a href="https://www.bloombergquint.com/law-and-policy/2018/04/22/rbi-circular-barring-banking-service-for-virtual-currencies-challenged-in-court#gs.3TQyKdU">being challenged in court</a>. Should the proposal to tax cryptocurrency trading under the GST regime be approved by the <keyword id="6355040" type="ORGANIZATION" weightage="20" keywordseo="GST-Council">GST Council</keyword>, then it will likely cause the RBI to revoke its outright ban. This would be a win for the government, because if the formal banking system were to embrace cryptocurrency trading, it would bring these transactions right under regulators’ noses and away from the peer-to-peer unregulated market.

India might charge goods and services tax for cryptocurrency dealings

<ul class="summary-list"><li>The best option for <keyword id="11892747" type="UNKNOWN" weightage="60" keywordseo="india" source="Orion">India</keyword> is to ban private cryptocurrencies, one of the country's top central bankers said Monday.</li><li>Private <keyword id="11893898" type="UNKNOWN" weightage="60" keywordseo="crypto" source="Orion">crypto</keyword> is worse than Ponzi schemes and pose a threat to financial stability, Rabi Sankar said.</li></ul>India's best choice is to ban private cryptocurrencies because of the risks they pose to the country's financial systems and sovereignty, a top central banker has warned.Rabi Sankar, deputy governor of the <keyword id="11894000" type="UNKNOWN" weightage="60" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword>, took aim at private crypto in a <a href="https://m.rbi.org.in/Scripts/BS_SpeechesView.aspx?Id=1196">speech at a local banking conference</a> on Monday, underlining Indian authorities' tough stance. He said cryptocurrencies can't really be defined as a currency, asset, or commodity, given that they don't have any underlying cash flow or intrinsic value, and that they are like a "Ponzi" scheme or even worse. For these reasons alone, private cryptocurrencies should be kept away from the formal financial system, he said."More substantially, they can (and if allowed most likely will) wreck the currency system, the monetary authority, the banking system, and in general government's ability to control the economy," Sankar said. This adds up to a threat to a country's financial sovereignty, he warned. It becomes vulnerable to manipulation by the private companies that create digital currencies or the governments that control them, according to Sankar."All these factors lead to the conclusion that banning cryptocurrency is perhaps the most advisable choice open to India," he told the conference.Sankar's tough words highlight Indian authorities' efforts to keep a grip on digital currencies in a country with an estimated 15 to 20 million crypto investors. India is second only to Vietnam in crypto adoption, according to the <a href="https://blog.chainalysis.com/reports/2021-global-crypto-adoption-index/">2021 Global Crypto Market Adoption Index</a> from Chainalysis.The government plans to <a href="https://markets.businessinsider.com/news/currencies/india-crypto-blockchain-cbdc-tax-ethereum-bitcoin-digital-assets-finance-2022-2">impose a 30% tax</a> on income from cryptocurrencies and other digital assets such as NFTs, or non-fungible tokens. It also wants to deduct 1% in tax at source on payments related to buying such assets.While<a href="https://www.businessinsider.in/cryptocurrency/news/taxes-gst-and-the-digital-rupee-crypto-policy-in-india-is-going-through-a-big-overhaul/slidelist/89499051.cms#slideid=89499616"> many</a> saw this as a move towards legitimizing crypto,<a href="https://www.businessinsider.in/cryptocurrency/news/taxes-gst-and-the-digital-rupee-crypto-policy-in-india-is-going-through-a-big-overhaul/slidelist/89499051.cms#slideid=89499616"> some</a> were worried the high tax might discourage crypto trading. At the same time, India plans to roll out its own digital currency, nicknamed the "digital <keyword id="6355302" type="UNKNOWN" weightage="60" keywordseo="rupee" source="Orion">rupee</keyword>," suggesting it is the private nature of private cryptocurrencies that is worrying authorities.India plans to introduce its <keyword id="11939356" type="UNKNOWN" weightage="60" keywordseo="central-bank-digital-currency" source="Orion">central bank digital currency</keyword>, or <keyword id="6791630" type="UNKNOWN" weightage="60" keywordseo="cbdc" source="Orion">CBDC</keyword>, before March 2023. Major central banks such as the US Federal Reserve and the Bank of England are already developing CBDCs, which provide a centralized, official alternative to pure cryptocurrencies. But it is the Chinese central bank that is leading the way in CBDCs, and is it several years ahead of its counterparts in its development program. Its <a href="https://markets.businessinsider.com/currencies/news/digital-yuan-china-central-bank-currency-visitors-2022-winter-olympics-2021-4-1030316791">digital yuan</a> is in use at the Beijing Winter Olympics on right now.Lawmakers in India's lower house in December introduced a bill to <a href="https://www.businessinsider.com/crypto-investing-india-ban-bitcoin-retail-investors-kimchi-premium-cbdc-2021-11">prohibit all private cryptocurrencies</a>, but the government later said it could instead <a href="https://markets.businessinsider.com/news/currencies/crypto-ban-india-regulate-bill-fines-sebi-cryptocurrency-digital-asset-2021-12">bring in regulation</a>.But Sankar said none of the arguments for crypto regulation stand up to basic scrutiny. "We have seen that crypto-technology is underpinned by a philosophy to evade government controls. Cryptocurrencies have specifically been developed to bypass the regulated financial system. These should be reason enough to treat them with caution."

India should ban 'Ponzi' private cryptos or risk wrecking the country's financial system, a top RBI central banker has warned

The Reserve Bank of India (<keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword>) will today launch the nation's first <keyword id="15195039" type="General" weightage="20" keywordseo="digital-rupee-pilot-project" source="Orion">digital rupee pilot project</keyword> for the <keyword id="3047329" type="General" weightage="20" keywordseo="wholesale-segment" source="Orion">wholesale segment</keyword>. In a statement, the central bank said that it will "soon commence pilot launches of <keyword id="10678165" type="General" weightage="20" keywordseo="digital-rupee" source="Orion">Digital Rupee</keyword> (ea,) for specific use cases. Accordingly, the first pilot in the Digital Rupee - Wholesale segment (ea,-W) shall commence on November 1, 2022". The central bank further informed that "the first pilot in Digital Rupee - Retail segment (ea,-R) is planned for launch within a month in select locations in closed user groups comprising customers and merchants. The details regarding operationalisation of ea,-R pilot shall be communicated in due course". RBI has selected nine banks for participation in the digital rupee's wholesale <keyword id="6644808" type="General" weightage="20" keywordseo="pilot-project" source="Orion">pilot project</keyword>. These are State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, Yes Bank, IDFC First Bank and HSBC. Finance Minister Nirmala Sitharaman in her budget speech on February 1 had announced that RBI will launch a Central Bank Digital Currency (CBDC) in this fiscal. CBDC is a digital form of currency notes issued by a central bank. Digital currency or rupee is an electronic form of money, that can be used in contactless transactions. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rupee-gains-8-paise-to-82-73-against-us-dollar/articleshow/95221397.cms" style="">Rupee gains 8 paise to 82.73 against US dollar</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/corporates/news/lts-q2-net-profit-grows-23-to-2229-cr-margins-soften-on-input-cost-pressures/articleshow/95209063.cms" style="">L&amp;T’s Q2 net profit grows 23% to ₹2,229 cr, margins soften on input cost pressures</a>

RBI to launch the nation's first digital rupee pilot project for the wholesale segment today

The government at the centre, which has been talking about bringing back <a href="http://www.businessinsider.in/searchresult.cms?query=black+money">black money</a> and curbing black money from generated within the country, has embarked upon landmark reforms. If these measures are implemented in a manner that their spirit is intact, black and illegal means of stashing away the money would soon be a passé. Because, the government is moving towards making the country cashless society soon, so that the transactions can be traced with the help of technology. 
 
This must be one of the most far reaching application of technology that can impact the common person who isn’t possessing a credit or debit card per se, since most of the banks till now extended this facility only to those who belonged to a certain income category, and it was really a matter of choice. 
 
Cashless country will transact with the help of financial tools such as bitcoin. Though this may take nearly a decade or two to make a shift completely, India is surely on the road to this destination already. 
 
While presenting <a href="http://timesofindia.indiatimes.com/business/india-business/Govt-proposes-tax-breaks-for-card-payments/articleshow/47772564.cms">Budget 2015</a>, <keyword id="6355261" type="POSITION" weightage="20" keywordseo="Finance-minister">Finance Minister</keyword> <keyword id="42575" type="PERSON" weightage="20" keywordseo="Arun-Jaitley">Arun Jaitley</keyword> had said cashless society will be a significant direction for India, which is treading the path of being the empowered nation as far as financial health is concerned. 
 
“One way to curb the flow of black money is to discourage transactions in cash. Majority of Indians can access RuPay or debit card,” he had said. With clearly an alternate structure in place, measures will soon be introduced that will incentivise credit or debit card transactions and discourage cash transactions from taking place. 
 
<a href="http://www.npci.org.in/">National Payments Corporation of India</a> has already launched RuPay debit and Credit cards to meet the needs of Indian consumers, traders, merchants and financial institutions such as banks etc. Flexibility of product platform and high levels of acceptance, along with hassle-free access and usage are among the strong reasons that RuPay is making inroads into various parts of the country. 
 If things work fine, the <keyword id="6354679" type="ORGANIZATION" weightage="20" keywordseo="GST">GST</keyword> system will be integrated by April 1, 2016 to ensure fool-proof indirect tax system that will ensure transparency. Jan Dhan Yojana, Aadhar and Mobile transactions – referred to as JAM Trinity – will be used to put the cashless transaction methods in place. 
This will allow the country to benefit from cleaner transactions and leakage-proof accountability for any high value transactions which often breed black money. 
 
Internationally too, the concept has already found takers in the west. Recently, the UK Payments Council said in 2013, cashless payments made up to over half of the total payments made by business houses, consumers and financial institutions. The number is bound to increase with every passing year. 
 The Reserve <keyword id="6355303" type="CITY" weightage="20" keywordseo="Bank-of-India">Bank of India</keyword> Governor <a href="http://www.businessinsider.in/searchresult.cms?query=Raghuram+Rajan+">Raghuram Rajan</a> had recently endorsed the transactions aided by bitcoin would help make India a cashless society soon which had all transactions accounted for. 
 
Digital currencies seem like the future of all transactions for India, with the thrust being placed upon curbing illegal transactions and rising levels of corruptions in various offices. 
 
One of the main problems the country would perhaps face in the implementation and integration of cashless society and transitioning into RuPay or <a href="http://www.businessinsider.in/Bitcoins-India-Travails-Attempting-Big-Change-Through-SmallChange/articleshow/28268118.cms">Bitcoin</a> is the fact that these digital currencies have huge security issues that can turn into a challenge. That apart, huge population groups using these currencies can also pose a challenge if they are not planned for. 
 
Fluctuation value is another major issue that could raise pertinent questions on the transactions aided by digital currency. A stable store value is the most important aspect of money. Something that fluctuates can actually change the way money is being used in various forms. 
However, these concerns are being raised at a point where the talks are still on about turning countries into cashless societies. Since the stalwarts of digital currency would have perceived these challenges in some form or the other, safety issues would soon be addressed to provide at least minimal insulation to the end users. 
 
Such security challenges can jeoparadise the future of cashless society. But, addressing them with caution and care would only help the concept of cashless society grow into a norm, more than the exception. 
 
RBI is confident that the cashless society would soon be inevitable, and digital currencies would drive that change. More and more usage would only mean wider acceptance and down the line, these currencies will ensure the challenges being addressed and resources being distributed well among various classes of the society. Though digital currencies can address a host of problems, using them without exercising proper discretion can also put society into danger. 
 
Digital currency will address the growth of e-commerce which is booming in India. This is where the future is, and the country has chosen to walk the road of future than be left behind. 
 Image: thinkstock

You Searched For "digital currency in india" and got 11 results

RBI, government working in complete harmony on crypto: Nirmala Sitharaman

IANS

India is considering a phased roll-out of a central bank digital currency

Isabelle Lee

India could begin testing a digital currency in December, says the country's central bank chief

Carla Mozée

India will launch a digital rupee in the next year and plans a 30% tax on crypto-related income, according to the finance minister

Adam Morgan McCarthy

Facebook has confirmed that Libra isn’t coming to India as government shies away from ‘private’ cryptocurrencies

Prabhjote Gill

The Fed's lack of innovation with the dollar means China, India, and others will dominate the digital currency race

Phil Rosen

An Indian tech major is helping Thai banks use digital currency while the RBI hangs back

Sriram Iyer

India might charge goods and services tax for cryptocurrency dealings

Dilsher Dhillon

India should ban 'Ponzi' private cryptos or risk wrecking the country's financial system, a top RBI central banker has warned

Hamza Fareed Malik

RBI to launch the nation's first digital rupee pilot project for the wholesale segment today

IANS

Cashless society for cleaner transactions

Preetam Kaushik

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