India Leans Toward Bitcoin Ban, Emphasizes CBDCs’ Benefits

India is moving closer to banning private cryptocurrencies like Bitcoin and Ethereum, citing the superior advantages of Central Bank Digital Currencies (CBDCs). According to recent reports from The Hindustan Times, key government bodies are favoring a ban on private cryptocurrencies due to the perceived risks, while highlighting that CBDCs offer similar benefits without the associated dangers.

Government officials, who spoke on condition of anonymity, explained that CBDCs provide the same advantages as private cryptos but with far fewer risks. “CBDCs can do whatever cryptos do. In fact, CBDCs have more benefits, minus the risks of private cryptocurrencies,” one official noted.

This stance aligns with India’s recent adoption of the IMF and Financial Stability Board’s (FSB) 2023 synthesis paper. The paper outlines minimum regulatory standards but allows countries like India to take stricter measures, including complete bans on private digital currencies.

Reserve Bank of India (RBI) Governor, Shaktikanta Das, has been vocal about the potential of CBDCs to promote financial inclusion. India’s digital rupee (e₹), launched in a pilot program in late 2022, has already attracted over 5 million users, with 16 banks participating. The State Bank of India (SBI) is also exploring CBDC use cases, including a pilot lending program for tenant farmers in Odisha and Andhra Pradesh.

India’s Crypto Journey: From Ban to Taxation

India's relationship with crypto has seen significant changes. Since 2013, the country has shifted from caution to heavy regulation. After the 2016 demonetization, interest in digital payments—and by extension, crypto—surged. However, the RBI banned banks from facilitating cryptocurrency transactions in 2018, a move later overturned by the Supreme Court in 2020.

While cryptocurrencies are not legal tender in India, they are now classified as Virtual Digital Assets (VDAs). The 2022 budget introduced a 30% tax on crypto profits and a 1% Tax Deducted at Source (TDS) on transactions exceeding INR 10,000.

Looking Ahead: The CBDC Path

Though the Indian government acknowledges the value of blockchain technology, it remains cautious about private cryptocurrencies. India’s preference for CBDCs is becoming clearer as the government expands the scope of its digital rupee initiative, guided by ongoing pilot projects. Final decisions on crypto regulation will follow extensive consultations, but all signs point toward a future where CBDCs take center stage, leaving private digital currencies in the shadow#ScrollOnBinance #UptoberBTC70K? #APESurge #XRPDonationsUSElections #Write2Earn!