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  /  crypto   /  Digital Rupee V/S Top Cryptocurrencies: What will Indian Crypto Investors Choose in 2022?
Cryptocurrencies

Digital Rupee V/S Top Cryptocurrencies: What will Indian Crypto Investors Choose in 2022?

Digital Rupee V/S Top Cryptocurrencies: What will Indian Crypto Investors Choose in 2022?

There has been a war going on between the digital rupee and the hottest cryptocurrencies in the global financial sector. International citizens have access to both the digital rupee as well as popular cryptocurrencies such as Bitcoin, Ethereum, Solana, and many more. But in the case of Indian crypto investors, there is a slight barrier from the Government of India. Though crypto tax is announced in the Union Budget of 2022, they still have to wait for the official announcement of government-recognized cryptocurrencies for legal transactions. There are speculations among Indian crypto investors to choose between the digital rupee or the other cryptocurrencies in India. Let’s explore which one will Indian crypto investors select in 2022— digital rupee or cryptocurrencies.

 

Digital rupee v/s cryptocurrencies in India

The Union Finance Minister Nirmala Sitharaman announced in the Union Budget 2022 that the RBI will launch a digital rupee in India known as Central Bank Digital Currency (CBDC) based on blockchain technology. It will be India’s own digital currency that will rival the most popular cryptocurrencies in India including Bitcoin, Ethereum, Avalanche, and hundreds of others in the global cryptocurrency market. The digital rupee in India will be cheaper as well as will follow a better, efficient transaction method taking place between two Indian crypto investors.

Since the launch of the digital rupee in India, Indian crypto investors will impose multiple strict regulations for more efficiency and seamless transactions. Meanwhile, there will also be 30% crypto tax and 1% TDS cut on transfer of the notified cryptocurrencies in India. CBDC is similar to fiat currency and can be exchangeable with any fiat currency on a one-to-one basis.

But there are key differences between cryptocurrencies in India and the digital rupee. Cryptocurrencies do not have any central authority and the intervention of any third party while the digital rupee in India will have a central authority from the Government of India and RBI. There is a very small transaction fee in cryptocurrencies but Indian crypto investors will only know about the transaction details of the digital rupee by 2023.

According to RBI, cryptocurrencies are threats to macroeconomic and financial stability. Investors must be aware of the highly volatile nature of cryptocurrencies just like Bitcoin was running at US$60Kin 2021 while US$44Kin 2022. Investing in cryptocurrencies in India will be a risky venture while the digital rupee will provide stability under the central authority. The CBDC will provide a boost to the Indian digital economy while cryptocurrencies might prove to be major threats to the Indian economy.

That being said, investors in India should research and evaluate which digital currency they want to invest in— digital rupee or cryptocurrencies. It is all about gaining hefty profit or incurring huge losses in digital wallets. But India is moving closer to recognizing popular cryptocurrencies for effective trading.