Images: Bitcoin: Megan Rexazin; NFT: Mohamed Hassan, both  from Pixabay
February 2, 2022: The Indian Minister for Finance  in her budget speech yesterday announced the introduction of Digital Rupee , using blockchain and other technologies, to to be issued by the Reserve Bank of India starting 2022-23 claiming that the Central Bank Digital Currency (CBDC) will give a big boost to digital economy. Digital currency will also lead to a more efficient and cheaper currency management system, she added.
Simultaneously, the central government has proposed to tax  private cryptocurrencies and other virtual digital assets like non-fungible tokens (NFTs). “ I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent,” finance minister Nirmala Sitharaman said in her budget speech.
The budget has also proposed a 1 per cent TDS (tax deducted at source) on payments towards virtual currencies beyond Rs 10,000 in a year and taxation of such gifts in the hands of the recipient.
Commented Probir Roy Chowdhury, partner, J. Sagar Associates (JSA). “Apart from the ‘digital rupee’, the government is not keen to recognise the availability of any other kind of digital currency in India. As a result, free market players will not be permitted to operate or use cryptocurrencies other than the digital currency issued by RBI. This will prevent market players from entering into several digital transactions that require such other kinds of cryptocurrencies.”
Ajay Kumar Thalluri, Business Fundamentals Analyst at GlobalData, a leading data and analytics company, offered this view:
“The announcement to leverage blockchain technology to create digital rupee may give an impetus to cryptocurrency exchange platforms and related companies that operate in India. The launch of a central bank-regulated digital currency in India could well mark a watershed moment that may encourage companies in the private space to increase hires around the emerging Web 3.0 technology.
“Currently, most job listings in India are around supporting software operations to maintaining software infrastructure while some companies are looking to build partnerships and create the compliance framework.
“The likes of Coinbase Global Inc, BitGo, Inc., and PayPal Holdings Inc, among others, are already hiring in India. BitGo and Coinbase listed roles as recent as January 2022 to recruit and build a team of engineers in India. Similarly, PayPal is hiring for software engineer roles for its blockchain, crypto and digital currencies (BCDC) business unit to drive continued growth.
“Interestingly, Seychelles-based OKEX Technology Co Ltd is looking to manage and enhance relationships with local crypto influencers to identify potential affiliates and acquire users, ‘Affiliate Business Development Manager’ role listed in January 2022 shows. Another exchange network company, Ripple Labs Inc is building crypto compliance, among others, to support a global payments business. 
Bitcoin etc may become legal tender: deVere Group
India is to tax and regulate Bitcoin and crypto after previously considering a ban, which could be the next step towards making it legal tender in the country, affirms the CEO of a game-changing global financial giant.The bassessment from Nigel Green of deVere Group, one of the largest independent financial advisory, asset management and fintech organisations, comes as Indian Finance Minister Nirmala Sitharaman announced a 30% tax on any income from the transfer of digital assets, a first for the nation.He says: “India, like many other countries, has come to the sensible conclusion that you cannot ban cryptocurrencies. It would have been a futile and backward-looking decision to do so.
“Borderless, digital currencies are unstoppable in our increasingly tech-driven, interconnected world – and the Indian authorities know this.Recognition of digital currencies by the world’s second most populous country and the world’s largest democracy is a landmark moment for cryptocurrencies.The clarity will further shore-up the crypto space and help drive prices."
“I’m confident that history will show that this is the first step to India adopting Bitcoin as legal tender in the future.  It remains a long way off, but it’s certainly a step in that direction.”