India plans to launch its own cryptocurrency

 India plans to launch its own cryptocurrency

India is scheduled to issue an electronic version of the rupee in the fiscal year 2022-2023, which starts on April 1.

Indian Finance Minister Nirmala Sitharaman said that the issuance of a central bank cryptocurrency will give a boost to the digital economy. Besides, this currency will also help create an efficient money management system with a cheaper cost.

Ms. Sitharaman did not give details on how the electronic rupee will work or look. Instead, she said, the coin uses blockchain and other technologies.

Blockchain is the underlying technology that helps create bitcoins. But to date, the definition of blockchain has expanded to include applications beyond cryptocurrencies.

If the above plan of India goes as planned, the country will be one of the largest economies in the world to issue a central bank cryptocurrency (CBDC).

In 2014, China began implementing a digital version of the renminbi. Over the past two years, the People's Bank of China has conducted a trial of the coin in the form of a lottery, in which the electronic yuan is given away to citizens in a number of cities for spending. This currency continues to be widely used by China, although it has not been launched nationally nor has a roadmap for this.

Elsewhere, Japan is also considering its own CBDC. The US Federal Reserve (Fed) last month published research on the electronic dollar but did not give a firm position on the issuance.

Although India wants to promote the e-rupee, the government has taken a hard line on cryptocurrencies like bitcoin by formulating regulations for the sector. On February 1, Ms. Sitharaman said that income from the transfer of digital assets should be taxed at 30%.