FX.co ★ India weighs crypto ban while promoting CBDC

India is on the verge of a pivotal decision regarding the future of its cryptocurrency market, with the government considering replacing Bitcoin with its own digital rupee. In an effort to shield investors from the risks of Bitcoin and explore safer options, regulatory authorities in the country are advocating for a ban on cryptocurrencies to pave the way for the Central Bank Digital Currency (CBDC).

Reserve Bank of India Governor Shaktikanta Das has made it clear that the digital rupee has already won the hearts of over 5 million users. In addition, 16 local banks have enthusiastically supported the CBDC pilot project.

Currently, cryptocurrencies are not officially recognized as legal tender in India. However, that has not stopped the government from collecting a hefty 30% tax on income gained from cryptocurrency transactions starting in 2022. So, if you decide to cash in on your Bitcoin, the government will be right there to take its cut.

Meanwhile, India is not alone in its digital ambitions. Even Israel is moving forward with its digital shekel project, despite facing budgetary challenges due to ongoing military operations. After all, simplifying access to finance is a global priority, and digital currencies seem poised to solve these banking puzzles.

So it seems that Bitcoin will soon have to give way to the digital rupee in India. The CBDC is on the horizon, offering greater speed, efficiency, and robust government support.