Crypto Stories

Union Budget 2022: India To Launch Its Own Digital Currency In 2022

By Gitumani Talukdar
Published February 1, 2022 Updated February 2, 2022

Finance Minister Nirmala Sitharaman presented the Union Budget for 2022 on February 1. Sitharaman revealed during her speech that India would obtain its own Central Bank Digital Currency (CBDC) this year, which will be controlled by the RBI. In essence, India’s finance minister has announced the launch of a Digital Rupee based on blockchain technology, which is also the basis of cryptocurrencies.

Sitharaman presented the Economic Survey 2021-22 to Parliament on Monday, in which the government forecasted an 8 to 8.5% GDP growth in the fiscal year 2022-23. However, this is not the first time it has been raised.

During the Winter Session, the Ministry of Finance stated that it had received a request from the RBI to amend the Reserve Bank of India Act, 1934, to widen the definition of “banknote” to include digital money. “

A Central Bank introduces Central Bank Digital Currency (CBDC).” In October 2021, the RBI requested that the RBI Act, 1934, be changed to broaden the definition of “banknote” to encompass digital money. 

Launch of Central Bank Digital Currency 

“The Reserve Bank of India has been assessing use cases and devising a phased implementation strategy for the launch of CBDC with little or no disruption,” stated Pankaj Chaudhary, Minister of State for Finance. The government would promote theme funds for blended financing to encourage vital sunrise industries such as climate action, deep-tech, digital economy, pharma, and agri-tech, with the government contribution restricted to 20% and the funds administered by private fund managers, according to the minister.

“Creating a blockchain-based central bank digital currency while placing virtual digital assets under the highest tax rate of 30% would assist decrease speculative activity, particularly in the cryptocurrency field,” Shravan Shetty, MD, Primus Partners-Digital Currency, stated. Shetty stated that the significant currency would aid in bringing the benefits of a digital currency to the economy in an organized manner.