Union Commerce and Industry Minister Piyush Goyal has reaffirmed India’s cautious stance on cryptocurrencies, emphasizing that while there is no outright ban, the government does not encourage their use.
Speaking at a recent event, Goyal stated that India has imposed heavy taxes on digital assets that lack sovereign backing, underscoring the government’s focus on promoting a Reserve Bank of India (RBI)-backed digital currency instead.
“As far as cryptocurrency, which is not backed by the Central Government, while there is no ban as such, we are taxing it very heavily. We don’t encourage it because we don’t want anybody to be stuck at some point with a cryptocurrency that has no backing and nobody at the backend,” Goyal said.
According to the minister, India’s upcoming central bank digital currency (CBDC) will feature blockchain-based traceability, ensuring transparency and compliance while maintaining the security and reliability of fiat currency.
“Our idea is that this will make it easier to transact, reduce paper consumption, and be faster than the current banking system, but it will also have traceability,” he added.
India has already introduced a defined tax framework for digital assets without granting them legal tender status. In the Union Budget 2022–23, the government imposed a 30% tax on income from the transfer of virtual digital assets (VDAs), such as crypto and NFTs, regardless of overall portfolio performance.
Additionally, a 1% tax deducted at source (TDS) applies to transactions above ₹10,000, aimed at improving traceability and compliance.
The minister’s remarks come as global discussions on digital currencies continue to evolve. While countries like the United States are exploring regulated stablecoin frameworks, India’s approach remains focused on caution, regulatory oversight, and the gradual rollout of a sovereign digital rupee backed by the RBI.