The Indian
government’s announcement that the country’s central bank will launch the
digital rupee has entrepreneurs excited. Presenting the Union Budget before
Parliament Tuesday, Finance Minister Nirmala Sitharaman said the Reserve Bank
of India (RBI) will issue the digital rupee over the next fiscal.

Paytm founder
Vijay Shekhar Sharma wrote on Twitter, “CBDC Jay Ho! What an incredible
announcement of #Budget 2022.”

Kunal Bahl, CEO,
of Snapdeal wrote, “The
significance of this step is monumental. For an economy of India’s size and
global influence to make a formal push into a digital currency is going to be
truly transformational.”

“The introduction of
CBDC sends a clear signal of India being a digital-first, efficiency-driven and
transparency-led system,” wrote CoinDCX, an Indian crypto exchange.

“CBDC with the backbone
of Blockchain with help us hold a powerful position in the global economy. We
welcome this visionary move. #Budget 2022.”

“The budget is
forward-looking and inspirational. It has touched key points that’ll help us
create modern, powerful, digital and sustained growth. We welcome the budget and
congratulate the Finance Minister,” the exchange wrote on its Twitter handle.

Also Read | Indian Union Budget 2022: Income from transfer of digital assets to be taxed at 30%

CBDC, or Central Bank
Digital Currency, is blockchain-based money but with a difference.
Cryptocurrency, the more popular mode of exchange on the blockchain, is based
on decentralized finance (DeFi).

In DeFi, there is no
central control over the ledger and no centralized authority guaranteeing transactions.
In CBDC, the country’s central bank exercises authority over transactions.

Also Read | India Union Budget 2022: FM projects 9.2% growth propelled by sharp rebound

China, once a hub of
cryptocurrency mining which later imposed a blanket ban on it, has been laying
out plans for a digital currency for some time now.

India, which has been anticipating
a government policy on crypto, has decided to break into the blockchain
ecosystem through the digital rupee.

The Indian government
has also decided to impose a 30% tax on transfer of digital assets.

Speaking to Opoyi,
Kshitij Purohit, Lead Commodities and Currencies, CapitalVia Global Research
Limited, said, “This is a significant move that is thought to have brought
cryptocurrencies and non-fungible tokens (NFTs) under the tax net.”

The long-awaited Cryptocurrency
and Regulation of Official Digital Currency Bill, however, has been given a
miss in the list of subjects to be discussed in the budget session of
Parliament.

While CBDC and the
digital asset tax indicate the government’s position on cryptocurrency, the
passing of the crypto Bill will be decisive in consolidating the framework for
digital money.