India Announces RBI-Backed, Traceable Digital Currency: Union Minister Says “We Are Taxing Crypto Very Heavily”

On 6 October 2025, Indian Union Minister Piyush Goyal said that the country is ready to launch a sovereign, Reserve Bank of India (RBI) -backed digital currency, which will be traceable. Goyal insisted that the country will not be encouraging cryptocurrency,” which does not have sovereign backing or which is not backed by assets, say it on the federal bank or local currency.”

The digital Rupee will be akin to regular currency. It will be backed by the central bank, while leveraging blockchain technology.

“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,” said Goyal during his official trip to Qatar.

BIG: India to launch RBI digital Currency!

Union Minister Piyush Goyal says Cryptos without asset or sovereign backing won’t be supported. pic.twitter.com/GXjsoXt5Fa

— Sapna Singh (@earnwithsapna) October 7, 2025

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“While There Is No Ban (On Crypto) As Such, We Are Taxing It Very Heavily,” Says India’s Union Minister

Per local news reports, Goyal also threw light on the country’s stance on cryptocurrency and said, “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.”

Currently, India’s stance is that it neither encourages nor outright bans crypto. But it imposes heavy taxes on digital assets – which includes 30% capital gains tax and 1% Tax Deducted at source (TDS). These heavy taxes have been in place since July 2022.

But is India doing enough? The crypto community will say not nearly! Traders are looking for clear crypto regulation and reduced taxation rates.

WazirX CEO Nischal Shetty Says Millions Of Indians Are Already Engaging With Crypto, But Policy Environment Hasn’t Caught Up

“India’s crypto ecosystem is often viewed only through the lens of its high taxes and regulatory ambiguity, but that misses the full picture. Despite these challenges, India consistently ranks among the top in the world for grassroots adoption, developer activity, and innovation,” said Shetty on an exclusive chat with 99Bitcoins.com

The demand is real; tens of millions of Indians are already engaging with crypto, but the policy environment hasn’t fully caught up yet.

“The biggest unlock would be rationalizing taxation, especially easing the TDS burden, to encourage legitimate onshore activity instead of pushing it offshore. Combined with clearer regulatory frameworks, this would create an environment where India’s young, tech-savvy population and vibrant developer community can build the next generation of Web3 products.”

“India has the potential not just to participate in Web3, but to lead it globally, provided the right policy clarity enables entrepreneurs to build for billions at home and then expand worldwide.”

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Key Takeaways

India’s strategy is clear: foster a state-guaranteed digital currency ecosystem with blockchain at its core, while keeping private, unregulated digital assets in check through heavy taxation.