India’s central bank will launch a digital rupee in two months time, as India becomes the latest country to embrace a digital currency
India is to adopt its own digital currency, and will issue a digital rupee in two months time, on 1 April 2022.
CNBC reported the development, after it was confirmed by the country’s finance minister on Tuesday.
“Introduction of a central bank digital currency will give a boost, a big boost to the digital economy,” Nirmala Sitharaman was quoted as saying, as she delivered the country’s annual budget.
“Digital currency will also lead to a more efficient and cheaper currency management system,” she is reported as saying.
The Reserve Bank of India will introduce the digital rupee in the 2022-2023 financial year which begins on 1 April.
Sitharaman gave no details about how the digital rupee would work or what it would look like, but said it would be introduced “using blockchain and other technologies.”
India meanwhile taking a tougher stance on cryptocurrencies such as bitcoin, and is currently working on regulation for the sector.
On Tuesday, Sitharaman reportedly said income from the transfer of virtual digital assets should be taxed at rate of 30 percent.
India is not alone in pushing for a digital currency, and is the second major economy to press ahead with it.
It was back in October last year when G7 finance ministers and central bank governors agreed cryptocurrency principles and corporate tax reforms.
The G7 finance officials also endorsed 13 public policy principles for central bank digital currencies, and stressed they should be grounded in transparency, the rule of law and sound economic governance.
China meanwhile has been testing a digital version of its yuan (digital yuan or e-CNY) since 2014 and is furthest ahead when it comes to launching CBDCs (central bank digital currency) globally.
Last month China’s central bank (People’s Bank of China) launched a pilot version of a wallet app, in an effort to expanded usage of the digital version of China’s sovereign currency.
In April 2021, the United Kingdom revealed it was exploring the potential of creating a digital currency backed by its central bank.
Chancellor, Rishi Sunak had asked the Bank of England and HM Treasury to look at the case for a new “Britcoin”, which has seen the joint creation of a Central Bank Digital Currency (CBDC) Taskforce to “co-ordinate the exploration of a potential UK CBDC.”
Japan is also looking into its own CBDC, and the US Federal Reserve last month released a study into a digital dollar, but did not take a firm position on whether it would issue one.