The government of India has no plan of introducing cryptocurrency, Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha on Monday. Currently, cryptocurrencies are unregulated in India, he said in a written reply.
“RBI does not issue a cryptocurrency. Traditional paper currency is a legal tender and is issued by RBI in terms of provisions of the RBI Act, 1994. A digital version of traditional paper currency is called Central Bank Digital Currency (CBDC),” he said.
The Reserve Bank of India is currently working towards a phased implementation strategy for the introduction of CBDC and examining use cases that could be implemented with little or no disruption, the minister said in another reply.
The introduction of CBDC has the potential to provide significant benefits such as reduced dependency on cash, higher seigniorage due to lower transaction costs, etc., he added.
In recent months, the government has repeatedly indicated that it is considering banning private cryptocurrencies. However, no decision has been made yet.
On November 23, an official document from the winter session of Parliament revealed that the central government was planning to introduce a bill to ban all private cryptocurrencies in India. However, the Cryptocurrency Regulation and the Official Digital Currency Bill 2021 was not introduced in the Parliament.
In her budget speech on February 1, Finance Minister Nirmala Sitharaman announced that the Reserve Bank of India would issue a new digital rupee in the fiscal year 2022-23 using blockchain and other technologies. She announced a 30 percent tax on digital asset transfer income. This tax will apply to cryptocurrency and non-fungible tokens.