India to launch state-backed 'digital rupee

India will introduce a state-backed "digital rupee" and impose a 30 percent tax on profits from virtual currencies, the government announced on Tuesday, report AFP/BSS.

The plans are a blow to one of the world's fastest-growing cryptocurrency markets, which has remained unregulated despite burgeoning local trading platforms and glitzy celebrity endorsements.

They make India the latest major emerging economy to rein in the sector, after China went even further in outlawing all cryptocurrency transactions last September.

"There has been a phenomenal increase in transactions in virtual digital assets," finance minister Nirmala Sitharaman told parliament, adding that the growth necessitated a proper tax framework.

Profits made trading cryptocurrencies and other digital assets will be taxed at 30 percent, while any losses from digital transactions will not be granted offsets against other income.

A one-percent tax will be deducted at the source for all digital asset transactions above an as-yet-unspecified threshold.

Sitharaman also said the central bank would introduce a "digital rupee", based on blockchain technology, by the end of March 2023.

"Introduction of central bank digital currency will give a big boost to (the) digital economy. Digital currency will also lead to a more efficient and cheaper currency management system," she said.