The 2022-2023 fiscal year for India begins on the first day of April. Within this year, the central bank of India plans on issuing its own digital rupee.
Nirmala Sitharaman is the finance minister for the country. The minister reported that the digital rupee introduction would have a foundation of blockchain technology, among others.
India’s Digital Rupee
This digital rupee would be a central bank digital currency, also known as a CBDC. India would be among the planet’s biggest economies to roll out a CBDC. China is already testing out its own digital yuan.
The finance minister reported the launch of the CBDC rupee this past Tuesday when delivering the nation’s yearly budget. She hoped that introducing a CBDC would inject serious fuel into India’s digital economy. Sitharaman went on to say that digital currency should make the country’s currency management system both cheaper and more efficient.
India Embracing Blockchain While Regulating Cryptocurrency?
Even though India is moving ahead with its digital rupee, the national government has also been known to be tough on Bitcoin and other cryptocurrencies. It’s also trying to formulate regulations for this particular sector of the national economy.
During her budget address, Sitharaman claimed that transferring virtual digital assets is a form of income. She proclaimed that they needed to be taxed and that the rate should be 30%.
Another Blockchain Application
The minister provided no actual details about how this digital rupee was going to work, much less what it was going to look like. However, she did say that various technologies would be involved, including blockchain.
Blockchain is the technology that wound up being developed simultaneously with Bitcoin. However, the definition of blockchain has taken an evolutionary path of its own since the various applications of it now extend past cryptocurrencies.
CBDCs in Other Countries
China leads the globe’s biggest economies in terms of developing digital versions of its own currency. The government based in Beijing has been working on a digital yuan since at least 2014.
Over the last 24 months, the People’s Bank of China is known to have conducted trials via lottery form. Citizens in particular cities have been given digital yuan to spend. China’s central bank has recently put attention to expanding the usage of the digital yuan. On the other hand, a nationwide launch of digital currency has yet to happen. Also, there is no known timeline for doing this, either.
Japan is another major economy looking into the possibility of a CBDC of its own. In the United States, the Federal Reserve has done a study into a potential digital dollar, but it has also not taken a firm position about whether issuing one or not would be sound policy.
A New Economic Competition in Asia
While Japan lags India and China in embracing digital currency, it does mean the world’s third-largest economy is looking into it. China is the second-biggest economy, and India the sixth largest. With multiple national economies of these sizes embracing CBDCs, it’s likely to open a new international economic competition across the biggest and most populated continent on the planet.
