India plans to double down on CBDC, reaffirms stance against crypto: report

India plans to double down on its central bank digital currency, Union Minister Piyush Goyal said on Monday at a government event in Doha, while reiterating the government's discouragement of cryptocurrencies.

According to an ANI news agency report, Goyal explained that the planned digital currency backed by the Reserve Bank of India aims to simplify transactions, reduce paper consumption, and enable faster, more traceable payments compared to traditional banking systems. The RBI has been piloting its CBDC, known as the digital rupee, since late 2022.

"Our idea is that this will only make it easier to transact. It will also reduce paper consumption and will be faster to transact than the banking system. But it will also have traceability," he said, according to the report.

The move signals the country's continued preference for state-backed digital money over private cryptocurrencies.

The minister noted that while India has not banned cryptocurrencies lacking central government backing, they are subject to heavy taxation to discourage their use. Reuters reported in September, citing a government document, that India is leaning against introducing comprehensive crypto legislation, arguing that regulating the asset class would effectively grant it "legitimacy."

India leads crypto adoption globally, with Asia Pacific solidifying its role as the global hub of grassroots crypto activity, according to a September Chainalysis report. India topped the global rankings for the second consecutive year, notably surpassing other countries in every criterion, including value received from retail centralized services, institutional services, and DeFi, the report stated.