The launch of a digital rupee was long-awaited as Minister of State for Finance Anurag Singh Thakur in February last year had hinted at the creation of a digital currency. The Union Budget 2022 addressed this by announcing that the country's central bank will be launching a digital currency (formal name to be finalised later) in Financial Year (FY) 2022-23. This bodes well for all tech enthusiasts as the government is making strides towards building the future of blockchain technology in the country.
The launch of a digital currency will provide an impetus to the entire fintech and business environment of the country. It is expected that if RBI allows the trading of digital Rupee on private exchanges, it will add a new dimension to public-private partnerships in India's fintech space.
The finance minister, in her speech, mentioned that the launching of the digital currency aims to boost the digital economy and lead to a more efficient and cheaper currency management system in the country. It is expected that this will put India in the front seat of innovation and digitisation. In her press conference after the budget, she provided some clarity on the digital Rupee by explaining that it will be different from regular cryptocurrencies, such as Bitcoin and Ether, which are of a decentralised nature as this will be launched by the central bank of the country. She also added that will be treated differently than digital assets and existing cryptocurrencies, which are henceforth going to be taxed at 30 per cent as provided in the Budget 2022-23.
In his speech one day after the budget, the Prime Minister lauded the government's plan to launch the digital currency. He mentioned that it will strengthen the fintech industry and bring down the need to print physical cash and, therefore, help bring down its cost. This digital currency will strengthen the digital payment infrastructure and lead to the adoption of blockchain technology. It will also help India become a leader in this blockchain revolution. The use of blockchain technology for a digital rupee shows that the government is preparing for a future where these concepts will become mainstream.
