Digital Rupee Coming Soon: India Plans Sovereign-Backed Alternative To Cryptocurrencies

Indian Commerce and Industry Minister Piyush Goyal announced that India will soon launch a digital currency backed by the Reserve Bank of India (RBI), designed to facilitate faster, paperless, and transparent transactions.

Speaking in Doha during an India-Qatar financial cooperation event, Goyal stated that the government does not encourage cryptocurrencies lacking sovereign or asset backing, noting that India only taxes, rather than bans, unbacked digital assets.

“We have not been encouraging cryptocurrency, which does not have sovereign backing or which is not backed by assets, say it on the federal bank or local currency. India has also announced that we will be coming out with a digital currency, which will be backed by a Reserve Bank of India guarantee-like currency. 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," Goyal said.

He clarified that the government’s 30% tax on income from digital assets and 1% TDS on transactions above ₹10,000 are meant to discourage speculative crypto trading and ensure traceability, not to outlaw crypto use entirely. This heavy taxation policy has, however, pushed over 90% of Indian crypto trading activity offshore, according to a recent Esya Centre report.

The proposed digital rupee will function similarly to stablecoins, maintaining value stability while offering traceability through blockchain-based systems.

Finance Minister Nirmala Sitharaman recently said that no country can ignore digital currencies’ global influence, urging preparedness to engage with stablecoins.

However, India remains cautious on fully regulating cryptocurrencies, citing potential systemic risks if they are brought into the mainstream financial ecosystem.

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