This past Tuesday, Indian Finance Minister Nirmala Sitharaman announced that India’s central bank is planning to introduce digital rupees as a new form of currency in April 2022. The statement comes as a shock due to the negative approach that India has taken towards cryptocurrencies in the past. In 2018, the central bank barred Indian banks from using cryptocurrencies. This was said to have resulted from reports claiming that there was a substantial amount of “suspicious transactions” occurring with top bitcoin exchanges, such as Zebpay, Unocoin, and Coinsecure.
Since the announcement on February 1, search terms “India” and “Crypto” have generated 120.88K mentions and reached 935.15M million users. Twitter dominates this conversation topic with over 101,839 mentions. The posts are overall expressing positive sentiments, with 62.68% being positive and 37.32% being negative.
Needless to say, this change of heart was unexpected but certainly a win for the FinTech industry. Sitharaman stated that instead of placing more restrictions on crypto, which had been heavily implied in November 2021, the government is instead opting for a 30% income tax on virtual digital assets. While many crypto investors are relieved that the rumored ban is now out of the picture, for now, some are concerned that the tax is too much. Specifically, there is a possibility that this will push some investors to liquify their assets or move their investments to another country all together.
JUST IN: A new petition to reduce the 30% crypto tax in India tops 10,000+ signatures in 2 hours. #reducecryptotax https://t.co/cBdVTnsoXT
— Watcher.Guru (@WatcherGuru) February 3, 2022
On the brighter side, others are viewing this as a substantial step towards legitimizing cryptocurrencies. The creation of the digital rupee is also expected to boost India’s economy. Prime Minister Modi stated that it will assist in online transactions becoming “more secure and risk-free.” This will positively contribute towards the global payment system and pave the way for other countries to introduce their own digital currency. When initiated in April, this will make India one of the first global major economies to introduce a central bank-backed digital currency.
Taxation of Virtual Digital Assets or #crypto is a step in the right direction. It gives a lot of clarity
India's focus on digital innovation and promotion of blockchain is welcome
The details need to be studied to comment further
But it's great news for crypto investors in India— Sumit Gupta (CoinDCX) (@smtgpt) February 1, 2022
Author: Eden Wallace
