India Advances RBI-Backed Digital Currency Amid 30% Crypto Tax Policy

India is charting a cautious path in the cryptocurrency landscape, opting for regulation over outright prohibition. Commerce Minister Piyush Goyal clarified the government's neutral stance during the India-Qatar Joint Commission, emphasizing a tax-driven regulatory approach rather than encouragement or discouragement of crypto assets.

The Reserve Bank of India (RBI) will introduce a sovereign digital currency, positioning it as a safer alternative to unbacked cryptocurrencies. This MOVE mirrors global trends like US stablecoins, aiming to modernize payments while maintaining oversight. The digital rupee promises faster transactions, reduced paper use, and enhanced traceability to combat fraud.

Existing cryptocurrencies face stringent taxation, with a flat 30% levy on gains. This policy reflects India's attempt to balance innovation with risk mitigation, as unbacked digital assets remain outside official endorsement. The RBI-backed solution seeks to capture blockchain efficiencies while avoiding the volatility of decentralized cryptocurrencies.