In the Union Budget 2022, Finance Minister, Nirmala Sitharaman, announced about India to have its own digital currency using blockchcain technology.

India will now join with some nations to launch its own blockchain currency.

“The imminent digital rupee cryptocurrency play a role in reducing huge capital expenditure for government in printing currencies. However, will the government restrict the circulation supply? If not then that can threaten the stability of the country’s financial system. Blockchain is a reliable data source, but if the blockchain is hacked, hackers can steal a huge amount of rupee coins that can easily damage the country’s economy which isn’t the case with physical currency,” says Abhinav Soomaney, Forensic and Crypto Expert.

Sitharaman says, “India will have a digital rupee this year, yet the government has not listed the Cryptocurrency Bill has not been listed in the tentative list of 15 proposed legislations that may come up before Parliament during the Budget Session.”

“RBI is working out a phased implementation strategy for introduction of Central Bank Digital Currency with little or no disruption,” says Pankaj Chaudhary, Minister of State in the Ministry of Finance.

“Introduction of CBDC has the potential to provide significant benefits, such as reduced dependency on cash, higher seigniorage due to lower transaction costs, reduced settlement risk. Introduction of CBDC would also possibly lead to a more robust, efficient, trusted, regulated and legal tender-based payments option. There are also associated risks which need to be carefully evaluated against the potential benefits," adds Chaudhary.

This is the fourth edition of Budget and the finance minister has proposed to tax virtual digital assets at 30 percent.

The Reserve Bank of India (RBI) has given warning to users, holders and traders of Virtual Currencies (VCs), including Bitcoins, regarding potential financial, operational, and legal, customer protection and security related risks that they are divulging themselves.