Union Budget 2022 – While presenting the 2022 Union Budget, FM Nirmala Sitharaman made the most significant announcement – introducing the New Digital Currency, Digital Rupee, that will boost India’s digital economy, starting in 2022.
Earlier today, in the Union Budget speech, Finance Minister of India, Nirmala Sitaraman, announced that the government, along with the RBI, will issue India’s first-ever official digital currency, Digital Rupee, in 2022-23, which will bring a significant boost to the Indian economy.
Digital Rupee will be launched using blockchain and other crypto technologies. FM Nirmala Sitharaman, in the budget, also proposed to slap an outrageous 30% tax on virtual digital assets, including NFTs and cryptocurrencies.
The steep 30% tax rate is a deterrent and puts an end to the ambiguity surrounding the status of crypto usage in India. By placing a tax on the digital asset class, the Indian Government has made cryptocurrency a legal currency all over the country. The introduction of the Digital Rupee by RBI will result in cheaper currency management.
Last year, the RBI was working on a strategy of phased implementation to introduce the CBDC (Central Bank Digital Currency) by evaluating the use cases to eliminate disruptions. Additionally, the RBI has also passed a proposal in October to amend the Reserve Bank of India Act, 1934, to improve the scope of the Bank Note definition and include currency in the most digital form.
The CBDC is similar to the currency that people hold in their wallets, with only its form. The CBDC will be available in digital wallets, supervised and regulated by the Reserve Bank of India. RBI will supervise the Digital Rupee in India, but it may also delegate some functions to the commercial banks.