No Discussion Over Crypto For Now, RBI To Issue Digital Currency: FM Sitharaman

Finance Minister said that Central bank will issue a digital currency. However, no discussions over what are Crypto and Crypto assets, for now, have been done. 

FM Nirmala Sitharaman addressing a post-Budget press conference. (Image: PIB)

New Delhi: Finance Minister Nirmala Sitharaman addressed a press conference hours after tabling the Union Budget 2022 in Parliament today. While speaking to reporters, FM Sitharaman touched upon the dynamics of all major announcements made by her in the Budget.

Sitharaman, while presenting the Budget, announced the launch of India's own digital currency by the Reserve Bank of India (RBI) next year that will be based on Blockchain technology.

During the press conference, Sitharaman was asked by reporters to share some light on how the government wants to rollout its digital currency. 

Responding to the same, Finance Minister said that Central bank will issue a digital currency. However, no discussions over what are Crypto and Crypto assets, for now, have been done. 

"Consultation with stakeholders is underway. The description of digital assets will come after the consultation," Sitharaman said.

#WATCH | Central bank will issue a digital currency, no discussions over what are Crypto & Crypto assets for now. Consultation with stakeholders is underway. The description of digital assets will come after the consultation: FM Nirmala Sitharaman pic.twitter.com/13a2eaUtWe

— ANI (@ANI) February 1, 2022

Furthermore, Finance Minister also said that everything that prevails outside of it (RBI's proposed digital currency) is assets being created by individuals and we are taxing profits made out of transactions of those assets, at 30 per cent.

#WATCH | FM Nirmala Sitharaman speaks on proposed Digital Rupee & cryptocurrencies: What RBI will issue is a digital currency. Everything that prevails outside of it is assets being created by individuals & we are taxing profits made out of transactions of those assets, at 30%. pic.twitter.com/acVOktqosH

— ANI (@ANI) February 1, 2022

The clarification by Finance Minister comes after Sitharaman, earlier in the day, announced a 30 per cent tax on any income from the transfer of virtual digital assets, specifying that no deductions and exemptions will be allowed.

Stressing that since there has been a phenomenal increase in transactions in virtual digital assets, Sitharaman said that the magnitude and frequency of these transactions have made it imperative to provide for a specific tax regime.

"Accordingly, for the taxation of virtual digital assets, I propose to provide that any income from transfer of any virtual digital asset shall be taxed at the rate of 30 per cent," she said, clearing the air around the taxation on cryptocurrencies.

In order to capture the transaction details, FM also proposed to provide for TDS on payment made in relation to transfer of virtual digital assets at the rate of 1 per cent of such consideration above a monetary threshold.

The Cryptocurrency and Regulation of Official Digital Currency Bill 2021 was set to be tabled in the Parliament in Winter Session. 

Currently, there are around 15 to 20 million crypto investors and there is no clarity on the size of the Indian crypto market.