India to Launch RBI-Backed Digital Currency for Faster, Safer Transactions

Core Insights - India is set to launch its own digital currency backed by the Reserve Bank of India (RBI), aiming to integrate blockchain technology into its financial ecosystem [1] - The initiative is designed to enhance transaction speed, safety, and transparency, operating under full government backing similar to regulated stablecoins in the US [2] - The Indian government remains cautious about privately issued digital currencies like Bitcoin, emphasizing the need for sovereign backing [3] Digital Currency Initiative - The new digital currency will allow for verifiable transactions, reducing the potential for illegal or untraceable transfers [2] - The RBI has consistently warned about the risks posed by unregulated digital assets and advocates for a Central Bank Digital Currency (CBDC) as a regulated alternative [4] Regulatory Environment - India has intensified its crackdown on crypto activities without a comprehensive regulatory framework, fearing that legitimizing crypto could make it systemic and harder to control [5] - Current taxation on crypto profits is set at a flat 30%, with a 1% Tax Deducted at Source (TDS) on transactions exceeding specific thresholds, and investors cannot offset crypto losses against other income [6] - Reports indicate that several Indian users have experienced bank account freezes related to peer-to-peer crypto transactions under investigation [6]