When Is the Digital Rupee Launch Date in India? How to Buy It
Indian Finance Minister Nirmala Sitharaman talked about CBDC in her speech. When is the digital rupee launch date in India and how can people buy it?
Feb. 2 2022, Published 11:18 a.m. ET
On Feb. 1, Indian Finance Minister Nirmala Sitharaman released the budget for the fiscal year 2022–2023 that will begin on Apr. 1. The budget promised massive spending on infrastructure. However, what caught the markets’ attention was the announcement related to digital asset taxation and the launch of the digital rupee. When is the digital rupee launch date in India and how can people buy it?
In her speech, Sitharaman talked about the CBDC (Central Bank Digital Currency). Here's what to expect from the digital rupee in 2022.
India plans to launch the digital rupee in fiscal 2022–2023.
India has a lead over developed markets when it comes to digital payments. Since the country demonetized higher value currency notes in 2016, digital payments have surged in the traditionally cash-dependent economy.
While markets expected India to launch a digital rupee, the announcement wasn't expected to come during this year’s annual budget. In the budget speech, Sitharaman said that the digital rupee would give a “big boost to the digital economy.”
The digital economy has expanded greatly in India led by a young population and low data rates, which are among the lowest in the world. In her budget speech, Sitharaman didn't provide many details about the digital rupee. She focused on how the country would spend aggressively to boost the economy.
However, Sitharaman held a press conference later and said, “A currency is a currency only when it is issued by the Central Bank, even if it's a crypto. By anything which is outside of that, loosely, all of us refer to be cryptocurrency, they are not currencies.”
When in the digital rupee launch date?
The name for India’s digital rupee hasn't been decided yet. The digital rupee is expected to launch in fiscal 2022–2023, but we don’t have an exact date. China is already experimenting with its digital yuan and U.S. companies like Starbucks participated in the trials.
In the U.S., the Fed released its study on digital dollars in January 2022. However, the U.S. Central Bank didn't say whether it would launch a digital dollar. The Biden administration is reportedly looking to issue an executive order asking federal agencies to study the national security and financial stability risks related to cryptocurrencies.
India’s RBI would release the digital rupee.
The RBI (Reserve Bank of India), which is India's central bank, will issue the digital rupee. People looking to buy the digital rupee will have to do it through the RBI. Currently, the RBI hasn’t provided any directions on how to buy the digital rupee.
India decided to impose steep taxes on cryptos.
So far, the Indian government’s position on digital assets like cryptocurrencies and NFTs has been ambiguous. Previously, there were reports that the country would ban cryptocurrency completely. There were also reports that the country would bring a bill to regulate digital assets.
In this year’s budget, Sitharaman at least ended the ambiguity related to digital asset taxation. India will impose a 30 percent tax on gains made on the transfer of digital assets. The taxation is higher than stocks.
The taxation is seen as another step towards legalizing cryptos in India. However, the country has made it clear that it won't allow cryptos as a legal tender. For now, the crypto tax is seen as the de facto legalization of cryptos in India.