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| India plans to tax cryptocurrency income |
India plans to launch a digital version of the rupee, becoming the latest country to join the creation of a state-backed virtual currency.
India's Finance Minister Nirmala Sitharaman said the country's central bank is expected to use blockchain and other technologies to launch the currency in the new fiscal year that begins in April.
Seetraman said the digital rupee is giving a huge boost to the digital economy. He did not provide further details on what it might be, how many digital rupees were originally used, or the potential impact of that rupee.
The penetration of digital payments in India has grown exponentially since late 2016. Apart from local players like Paytm, some of the world's largest technology companies including Google and Facebook have joined the cashless payments craze in India.
The announcement comes as other major economies are pressing ahead with their own plans to launch virtual versions of their national currencies.
China has been experimenting with the digital yuan in major cities for two years. The digital yuan is one of three payment methods available to athletes, officials and journalists attending the Winter Olympics in Beijing this month.
Europe and the United States are also exploring the potential of the digital euro and digital dollar. Although both emphasize the importance of mitigating the financial risks posed by electronic money.
India has focused on cryptocurrencies and how best to regulate digital assets for years. Sometimes I think about banning cryptocurrency.
Last year, an ambiguously worded proposal was posted on the Indian Parliament's website, indicating that the government was considering banning all private cryptocurrencies in India.
Central banks have often raised concerns that cryptocurrencies could be used for money laundering and terrorist financing.
India announces plans for digital rupee
Seetraman suggested that the authorities are willing to continue allowing cryptocurrency trading in the country if certain regulations are in place.
She said the Indian government could impose a 30% tax on the profits of virtual digital assets.
Sitraman said that the trading volume of virtual digital assets has increased significantly. The number and frequency of such operations makes it necessary to provide a special tax regime.
Cryptocurrency investors in India welcomed the comments. Industry experts point out that Seetraman's comments indicate that Asia's third largest economy will not ban cryptocurrencies.
Virtual currencies have been attracting Indians since the pandemic began. Although the government does not have an estimate of the number of people trading cryptocurrency, it is reported that the country has as many as 20 million cryptocurrency investors.