Since its inception, cryptocurrencies have generated controversy. If we go back ten years, we wouldn’t recognise the word “crypto.” However, India has come a long way since then. Due to their scepticism, cryptocurrencies are still feared by some, although the number of these individuals is steadily declining as more and more people buy them. India has advanced significantly by including it in income tax returns from April 2021.
What, however, is the outlook for cryptocurrencies?
Cryptocurrencies are not widely accepted by governments. In 2020, it was reported that the Indian government wanted to outlaw cryptocurrency. Additionally, the Reserve Bank of India anticipates launching its digital currency by the end of the current fiscal year, which is April 2023. The Central Bank Digital Currency (CBDC) will be distinct from existing cryptocurrencies because, in the majority of nations, they are not recognised as legal tender or means of exchange. A CBDC, as opposed to a cryptocurrency, can be used to reliably offset payment commitments. Additionally, there is uncertainty around who exactly owns the cryptocurrency, but CBDC will give the public stability and security. When compared to a digital currency from a central bank, which is normally backed by a sovereign nation, there is no assurance that the value saved in the form of cryptocurrencies will always be paid and that it is a stable value at all times. In the Union Budget 2022-23, Finance Minister Nirmala Sitharaman announced that the Indian government will levy a 30% tax on crypto-asset profits. After being hesitant and fearful of adopting cryptocurrency, the Indian government has finally decided to embrace the virtual form of money. Although there is still uncertainty about the future of cryptocurrency, these announcements have sent mixed signals to crypto enthusiasts that cryptocurrency is one step closer to becoming legal in the country.