India eyes launch of blockchain-based RBI digital currency
India is moving closer to introducing a central bank-backed digital currency (CBDC), designed to simplify transactions, reduce paper use, and offer faster, traceable payments built on blockchain technology
According to several media reports, Piyush Goyal, the minister of commerce, has announced that India will soon introduce a digital currency that is insured by the Reserve Bank of India (RBI).
“We will be coming out with a digital currency backed by the RBI guarantee. It will be like normal currency—somewhat like the stablecoins that the USA has announced,” Goyal said during a recent roundtable in Qatar.
He added that the new system will not only speed up transactions and cut paper usage but also ensure traceability through blockchain, making it easier to track and prevent illegal activities. The remarks follow Finance Minister Nirmala Sitharaman’s comments that stablecoins are rapidly transforming global finance and that countries must adapt or risk being left behind.
Testing coexistence with the e-Rupee
According to Goyal, the proposed digital currency will coexist with India’s CBDC, known as the e-rupee. The RBI launched its first CBDC pilot for wholesale transactions in November 2022, involving nine major banks including State Bank of India, HDFC Bank, ICICI Bank, and HSBC. A retail version followed in December 2022, allowing consumers to use a digital wallet via participating banks.
As of 2025, India counts over seven million CBDC users, with the RBI focusing on real-world use cases rather than a full-scale rollout. RBI Deputy Governor T. Rabi Sankar said the goal is to create programmable CBDC applications that allow users to set custom conditions for spending.
“A user should be able to attach a program to the CBDC and then use it without needing to understand the technology,” Sankar explained during the Global Fintech Fest 2025. He added that cross-border payments remain the key long-term application for CBDCs.
India’s move toward deposit tokenisation
The RBI is now preparing a pilot project on deposit tokenisation, leveraging the wholesale version of its CBDC as a foundational layer. According to Reuters, the central bank is collaborating with select lenders to test this innovation.
RBI Chief General Manager Suvendu Pati explained: “Risks in asset tokenisation are manageable and can be addressed through regulatory guardrails.”
Tokenisation converts financial assets such as deposits, bonds, or equities into digital formats recorded on blockchain, enhancing security and transaction speed while lowering costs.
The RBI’s January 2025 Payment System Report also revealed significant progress in card tokenisation, with over 910 million tokens created by December 2024 and more than 3.2 billion transactions processed since its launch.
Digital future remains state-controlled
While India is embracing blockchain-based financial systems, it continues to discourage decentralised cryptocurrency trading. Goyal reiterated that India’s approach is to regulate, not ban, crypto assets, but also to ensure they remain outside the definition of legal tender.
“There’s no ban on cryptocurrency, but we tax it heavily. We don’t encourage it because there’s no sovereign backing,” Goyal said. “You can use it at your own risk and cost—the government neither encourages nor discourages, it only taxes.”
India levies a GST of 18 percent on trades, a 1 percent TDS on transactions over ₹10,000 ($112), and a 30 percent flat tax on cryptocurrency gains. A number of smaller businesses are anticipated to close or merge in 2025 as a result of the consolidation of Indian cryptocurrency exchanges brought about by regulatory pressure and the absence of official legislation pertaining to digital assets.
India ranked first in crypto adoption
In separate news, according to the sixth Chainalysis Global Crypto Adoption Index, India ranked first in cryptocurrency adoption for 2025. The United States comes in second, indicating a rise in activity in both nations. The research shows, market trends are being influenced by institutional investment and grassroots usage. India leads in all measured categories, including retail and institutional flows. The US rise is linked to higher institutional involvement following the approval of spot bitcoin ETFs. Pakistan, Vietnam, and Brazil complete the top five.
Meanwhile, India’s cryptocurrency market has expanded rapidly, leading to increased attention from tax authorities. In August, the Income Tax Department issued over 44,000 notices to individuals who failed to report Virtual Digital Asset (VDA) transactions in their income tax returns. This forms part of a broader initiative to ensure compliance and bring crypto-related earnings within the tax framework.
