double hit ofIndia on the currency and fiscal side. In presenting the 2022 budget law, Finance Minister Nirmala Sitharaman announced two decisions: first, between this year and next it will be launched on the markets digital rupee; second, New Delhi will dictate a 30% tax on income generated by cryptocurrencies and from the transfer of other digital assets.
India to the digital rupee
"The digital currency will lead to a more efficient and economical currency management system - explained Sitharam - For this reason we have proposed the introduction of the digital rupee, which will be managed through the blockchain by the Reserve Bank of India starting from the current two-year period" .
The previous cases: from the Caribbean to China via Africa
India thus adopts a pioneering decision, but it will not be the first country to have an official digital currency. There Nigeria, Bahamas and other Caribbean islands already have legal tender digital currencies and the China experimented with the digital yuan (e-CNY) for two years in the main cities: today the e-yuans are in the digital wallet of over 260 million users and the use of the digital currency will be encouraged during the Beijing Winter Olympics. Then there is the case of El Salvador, the first and so far only country in the world to have adopted bitcoin as a legal tender.
The caution of the ECB and the Fed
Last year too ECB had launched a project for the digital euro, but with a decidedly more cautious approach than the Indian one: at the moment, in fact, no issuance is envisaged, but an investigation is underway to evaluate the convenience of such a change. The topic of digital currencies also takes time Federal Reserve, which has not yet taken an official position.
India: New tax comes after cryptocurrency boom
As for the new one 30% tax on cryptocurrency profits, New Delhi's move will certainly have an impact on the market for digital currencies and Non Fungible Tokens (NFTs), the use of which in India has recently recorded a resounding surge.
According to industry estimates, the number of cryptocurrency investors in the country fluctuates between 15 and 20 million: a veritable ocean of people, capable of mobilizing a total of 400 billion rupees (equal to 4,78 billion euros) in a year. It is estimated that almost one in four Indians with internet access (23,4%) have invested something in cryptocurrencies.
The warning from the Monetary Fund
Meanwhile, yesterday the International Monetary Fund has launched a warning to emerging countries asking them to do not use cryptocurrencies instead of traditional coins. The reason is simple: this practice "is causing the destabilization of capital flows in developing economies due to extreme price swings", explained Tobias Adrian, financial adviser to the IMF, recalling that since last fall's peak “The cryptocurrency market has lost an estimated $XNUMX trillion in value.”
