India to launch ‘digital rupee’, tax crypto

India will introduce a state-backed  "digital rupee" and impose a 30 per cent tax on profits from virtual currencies, the government announced Tuesday while unveiling the next financial year's budget.

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 per cent from April, while any losses from digital transactions will not be granted offsets against other income.