Union Budget 2022: In her budget speech, the Union’s finance minister made a major announcement about digital currencies. A digital currency will be launched by the Reserve Bank of India (RBI) this year. It is expected to be released by the end of 2022 or early in 2023. The Central Bank Digital Currency is based on blockchain technology, among other technologies. India’s economy, therefore, stands to benefit greatly from the arrival of the Indian Digital Currency.
The transfer of any digital asset will also be taxed at 30 percent, as Sitharaman explained during her budget speech. Nirmala Sitharaman points out that virtual digital assets have seen an increase in transactions. As a result, a special taxation system for virtual digital assets is required. I propose a 30 percent tax on all income generated from the transfer of a virtual digital asset. A deduction shall not be allowed for any expenditure or element while computing such income, except for the cost of acquisition for any loss arising from a transfer of virtual digital assets, which cannot be set off against any loss.”
The Finance Minister went on to say that with this budget India would lay the groundwork for the next 25 years. Growth is forecast at 9.2% for the next fiscal year. According to the latest estimates, the Indian economy has grown by 9.2% for the current year.
Unlike cryptocurrencies, digital currencies are more stable and regulated. Unlike digital currencies issued by governments, crypto-currencies and stable coins are decentralized.
According to an analysis by the Financial Action Task Force (FATF), a non-profit organization dedicated to preventing money laundering and terrorism financing, cryptocurrencies offer better privacy than mainstream digital payment methods. These services can be misused by terrorist organizations and criminals for the wrong reasons.
Decentralized cryptocurrencies make it difficult for central banks to control an economy’s money supply since they do not have their most crucial tools.