After years of uncertainty and talks of indefinite bans, India has finally decided to welcome cryptocurrency.
In her budget speech on Tuesday, Finance Minister Nirmala Sitharam informed Parliament that the government plans on introduced a 30% income tax for all crypto-based digital transactions. According to the minister, this would remove the uncertainties associated with crypto transactions in the country.
Darshan Bathija, CEO of Vauld, a crypto-exchange platform based in Singapore, agrees with this sentiment and stated that “Imposing the tax rate makes crypto trading official now & any concern of a ban is off the table.” However, Darshan also noted that the increased tax could prompt traders to move to platforms in other countries, thus, decreasing the revenue received by the government.
Despite repeated government attempts to curb its use, the local crypto market in the sub-continent continued to grow, surging to 641% through June 2021. Following the announcement, the price of Bitcoin increased by over 2%.
While India does not have any laws regulating the trade of virtual coins, the finance minister mentioned that the Reserve Bank of India is taking steps to introduce a digital version of the Indian Rupee via a phased implementation strategy. According to the minister, the digital rupee will be cheaper and a more effective method of currency management.
India will be following China in introducing digital currencies as it has already introduced the digital Yuan, which athletes can use to purchase goods in the Beijing Winter Olympics. The US Federal Reserve & the Bank of England have also expressed their interest in creating digital currencies.
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