Latest News from Coin Geek
Coin Geek
2 days ago
- Business
- Coin Geek
India's digital asset sector lobbies for tax cuts
Getting your Trinity Audio player ready... India's digital asset industry is lobbying for cuts to taxes that have driven crypto trading offshore, in a bid to take advantage of a perceived softening of approach toward the industry from New Delhi, according to a report by the Financial Times (FT). Executives at digital asset exchanges reportedly told the FT that Prime Minister Narendra Modi's government had become more receptive and engaged with them following the return to office of United States President Donald Trump and his unprecedented embracing of digital assets. 'Thanks to Trump, the positive momentum that has happened in crypto has impacted India as well,' said Ashish Singhal, co-founder of CoinSwitch, one of India's largest digital asset exchanges, according to the report. Singhal also noted that industry meetings with policymakers now take place 'monthly, if not weekly,' up from little more than once every six months until recently. He said that in these increased meetings, the industry's 'big ask' was a reduction in 'very harshly' imposed taxes. Specifically, in India, digital asset transactions are currently subject to a 30% capital gains tax and a 1% levy on every transaction, introduced in 2022 to help authorities combat the illicit use of digital assets for criminal purposes. According to a study by the New Delhi-based think tank Esya Centre, the imposition of these taxes caused virtual digital asset (VDA) exchanges to lose 81% of their trading volume in four months. Further, the study found that 'the total VDA assets held by Indians in VDA exchanges globally amount to USD 13.38 billion, of which only 9.02 percent are held on compliant domestic platforms.' The implication is that the taxes effectively pushed more than 90% of digital asset trading by Indians offshore. In addition to the 'harsh' taxes, the Reserve Bank of India (RBI)—the country's central bank—has been a vocal digital asset critic to the extent that it banned banks from providing services to digital asset companies in 2018—a measure that was reversed by the Supreme Court in 2020—and in 2023 sought a complete ban on digital assets in India. However, in another indication of a changing approach, the RBI's new governor, Sanjay Malhotra, has avoided direct criticism of the sector, instead saying it is awaiting the government's industry paper. Singhal from CoinSwitch told the FT that the relationship with the RBI 'has gone from negative to neutral. I will still not quite call it positive yet,' adding that 'we are still maybe a couple of years away from proper regulation… which could help the industry gain further steam.' In February, Economic Affairs Secretary Ajay Seth stated that the government was reviewing its discussion paper on digital assets, originally set for release in September 2024, to reflect changing international regulations. 'More than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance, where do they see the importance of crypto assets. In that stride, we are having a look at the discussion paper once again,' Seth said in an interview. Watch: 'Disruptive' blockchain can be useful for India title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen=""> Ashish Singhal Donald Trump India Narendra Modi Regulation Tax United States
Coin Geek
2 days ago
- Business
- Coin Geek
US bill elevates CFTC, but no one works there anymore
Getting your Trinity Audio player ready... America's plan for a digital asset market structure regulatory framework envisions a major role for a regulator that's having serious trouble staffing its upper echelons. On Wednesday, United States Vice-President J.D. Vance gave the keynote address on day two of the BTC 2025 conference in Las Vegas. Vance addressed a number of subjects, including his belief that Congress needs to pass digital asset market structure legislation and get a finished bill on President Trump's desk for signing into law ASAP. The following day, the House of Representatives Financial Services Committee (FSC) issued their new digital asset market structure bill, which they've christened the Digital Asset Market Clarity (CLARITY) Act. (Section-by-section summary here.) The bill is an updated version of the FIT21 bill that the House passed last year but wasn't addressed by the Senate before Congress adjourned for the 2024 federal election. In announcing the bill, FSC chair French Hill (R-AR) offered the necessary homilies to consumer protection, regulatory clarity, and 'American innovation.' CLARITY is billed as having bipartisan support, citing Democrat co-sponsors Warren Davidson (R-OH), Angie Craig (D-MN), Ritchie Torres (D-NY), and Don Davis (D-NC). CoinGeek's intrepid James Field will be along any moment now with a deeper dive into CLARITY's nuts and bolts, but as with FIT21, CLARITY establishes the Commodity Futures Trading Commission (CFTC) as the primary regulator of digital assets that aren't considered securities. So, basically all digital assets, given the Securities and Exchange Commission (SEC) doesn't believe any digital assets are securities. To underscore that systematic disengagement, the SEC announced on May 29 that it wasn't interested in regulating 'protocol staking activities,' because someone somewhere will presumably ensure these activities are conducted fairly. (The sole remaining Democrat commissioner at the SEC believes the regulator is doing 'more harm than good by purporting to carve out broad categories of crypto products without analyzing the realities of how they really work.') CLARITY does envision the SEC having anti-fraud authority over stablecoins that are allowed to operate under the new rules proposed by bills in the Senate (GENIUS) and House (STABLE). The SEC will also take point on digital asset activity by 'SEC-registered broker-dealers and national securities exchanges where such registrants are exempt from registration with the CFTC.' However, the SEC is not allowed to touch 'certain decentralized finance activities related to the operation and maintenance of blockchain networks.' These activities include 'validating or providing incidental services with respect to a digital asset, providing user-interfaces for a blockchain network, publishing and updating software, or developing wallets for blockchain networks.' That will likely come as a relief to the SEC, as it will spare staff from having to craft a separate press release denying any responsibility for overseeing DeFi activities. If you want to get ahead of next week's disavowal, a lobby group just asked the SEC to ignore decentralized autonomous organizations (DAOs), so 5…4…3…2…1… CFTC exodus leaves no one manning the gates Looking to the CFTC to shoulder the regulatory burden is complicated by the fact that nobody seems to want to serve as a CFTC commissioner anymore. Incoming Chairman Brian Quintenz has yet to be confirmed by the Senate, but when he finally takes his seat in the corner office, he'll find himself staring at a lot of empty chairs where commissioners usually sit. This will be the last week on the job for commissioners Summer Mersinger and Christy Goldsmith Romero, while Caroline Pham has announced her plan to depart once Quintenz is confirmed. Kristin Johnson is also headed for the exits, although she promised to stay until 'later this year,' likely just long enough for her replacement to be nominated and confirmed. With former Chair Rostin Behnam having resigned on January 20, Quintenz will have the CFTC all to himself, at least, until Trump gets around to nominating new commissioners. It's a good thing that CLARITY gives the CFTC/SEC a 360-day window following passage in which to figure out who's looking after what. (In the interim? Crypto Thunderdome, apparently.) Despite having pulled her own ripcord, Romero appeared a little uneasy over the mass exodus at a Brookings Institution event this week. 'What happens if the CFTC gets down to one and gets new authority for crypto? It's going to be really, really hard, right? You're not going to have the same push and pull … I worry about that at the CFTC, and I worry about that at other agencies as well.' As befitting America's public-private revolving door, Mersinger is leaving to become CEO of the Blockchain Association industry lobbying group. Pham is also returning to the private sector, although she said didn't 'have any specific plans' to announce. Back to the top ↑ Will Trump's crypto ventures thwart legislative progress? Vance's Vegas speech expressed optimism that the Senate could 'move quickly on passing a clean GENIUS Act and for the House to follow-up and do the same.' The 'clean' reference reflects the hope that when the Senate brings GENIUS to the floor for debate (likely next week), it will largely ignore the 53 proposed amendments to its text. As for Vance's urging of Congress to act with similar haste to bring a finished market structure bill to Trump's desk, concerns are mounting that the president's seemingly endless list of self-interested crypto ventures could discourage support for legislatively blessing these money-making moves after the fact. While the crypto sector and pro-crypto pols previously suggested that both stablecoin and market structure legislation could be on Trump's desk by Labor Day, the rising outrage over Trump's increasingly brazen crypto cash grabs could complicate that timeline. One unnamed 'crypto executive' told Politico this week that these concerns could mean market structure legislation 'won't move forward until after the midterm elections next year.' Speaking of, Rep. Jamie Raskin (D-MD) announced Wednesday that he'd launched a probe into Trump's recent dinner at his Virginia golf club for the top 220 holders of his $TRUMP memecoin. The Washington Post reported that Raskin's probe is focused on who paid big bucks to breathe the same air as Trump, even though reports suggest that nobody in attendance got much in the way of Trump facetime. Raskin believes that publicly releasing the list of Trump's deep-pocketed dinner guests will 'let the American people know who is putting tens of millions of dollars into our President's pocket so we can start to figure out what—beyond virtually worthless memecoins—they are getting in exchange for all this money.' As with similar Democrat-led probes by the likes of Sen. Richard Blumenthal (D-CT), Dems lack the votes to progress these probes beyond the press release stage. Until their Republican colleagues relocate their lost capacity for outrage, these efforts are purely performative. Back to the top ↑ Tokenized retirement? Meanwhile, the Trump administration continues to expunge any and all Biden-era rules and regs that might impede 'number go up.' On May 28, the Department of Labor's Employee Benefits Security Administration formally rescinded Biden-era guidance that has deterred employers from including digital assets in their employees' 401(k) retirement plans. The guidance in question was issued in March 2022 and urged 401(k) plan sponsors to exercise 'extreme care' before including digital assets alongside more traditional financial investment options. The new guidance neither endorses nor disapproves of tokens in 401(k) plans, just reaffirms the department's 'neutral stance.' Secretary of Labor Lori Chavez-DeRemer said the Biden administration 'made a choice to put their thumb on the scale,' but the new sheriffs in town are 'rolling back this overreach and making it clear that investment decisions should be made by fiduciaries, not D.C. bureaucrats.' There was nearly $9 trillion dollars held in 401(k) accounts at the end of 2024, with over one-third of Americans contributing to the plans. The ongoing upheaval in the stock market due to Trump's on-again/off-again tariffs has many contributors looking at alternative investment options, although prominent tokens like BTC haven't been spared this volatility. For what it's worth, the fact that BTC has fallen 5% this week—during the year's biggest pro-BTC event, and despite announcements by multiple new entrants launching BTC 'treasury' strategies that will see them spending billions of dollars acquiring tokens—should give any 401(k) manager pause regarding the wisdom of injecting additional volatility into workers' retirement schemes. Back to the top ↑ Saylor told Trumps to mortgage Mar-a-Lago and buy BTC Among the entities announcing new BTC treasury strategies this week was Trump Media and Technology Group (TMTG), the parent company of the Truth Social platform. TMTG is raising $2.5 billion to buy BTC, swiftly elevating itself to the upper tier of companies that have gone down this road. Day 2 of the BTC Vegas shindig saw the president's sons, Donald Jr. and Eric Trump take the stage to discuss TMTG's BTC buying plans, including the revelation that they were both egged on and inspired by Michael Saylor, founder of Strategy (formerly MicroStrategy) (NASDAQ: MSTR). Strategy bought another 4,020 BTC on Monday, boosting its treasury to 580,250 tokens, and almost immediately announced plans to raise even more debt to buy even more BTC. Strategy's strategy has been mimicked by a growing number of firms, including former meme-stock GameStop (NASDAQ: GME), which announced Wednesday that it had spent $512 million buying 4,710 BTC as the first step in launching its own BTC treasury. Eric Trump told the Vegas audience that Saylor had long been urging the Trump family to 'do what I'm doing,' going as far as to suggest they mortgage Trump's Mar-a-Lago estate in Florida. (To be fair, Saylor has been telling everyone to mortgage their homes to buy BTC since 2021.) Trump opted instead to use TMTG to make his BTC bet, but so far, the market's reaction has been anything but positive. TMTG's DJT stock briefly spiked in the wake of its BTC announcement but has since fallen below $21, a low it hasn't touched since early April. This is by no means an isolated incident. GameStop's shares surged to nearly $37 in the wake of its BTC announcement but closed Thursday below $30. Like Strategy and its clones MetaPlanet, Twenty-One Capital, and others, there's little in the way of fundamentals behind these companies, rendering them slaves to BTC's random surges and plunges. In TMTG's case, the company's high profile belies a nonexistent business model, with revenue in the first three months of 2025 failing to surpass $1 million. The company's share price values the company at a multiple of 1,800x its annual revenue, meaning if it wasn't attached to the President of the United States, it would have been taken out behind the barn and put out of its misery ages ago. But that was yesterday, and Toto, I don't think we're in Kansas anymore. Back to the top ↑ Watch: Teranode is the digital backbone of Bitcoin title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Coin Geek
2 days ago
- Business
- Coin Geek
South Africa: Digital assets not subject to forex controls
Getting your Trinity Audio player ready... Digital assets are not capital or currency and are not covered by South Africa's foreign exchange controls, a local court has ruled. The high-profile court case pitted Africa's largest lender, Standard Bank (NASDAQ: SBGOF), against the South African Reserve Bank (SARB) and a local firm, Leo Cash & Carry (LCC). The central bank had seized over $1 million held in a Standard Bank account by the firm, which had been declared insolvent. Standard had placed a hold over the funds as the client owed an overdraft facility extended years ago. However, the central bank declared the funds in the account as forfeited to the state as, before it collapsed, LCC had purchased $37 million worth of BTC and transferred it abroad without official authorization, breaching forex laws. Standard Bank's legal team argued that 'crypto' is neither currency nor legal tender in South Africa, so the Exchange Control Regulations didn't apply. In his ruling, Judge M.P Motha sided with Standard Bank, and according to him, 'The answer lies in one's interpretation of the word currency.' 'Cryptocurrency is not money. The construction that cryptocurrency is money, by looking at the definition of money which includes foreign currency, is strained and impractical,' the Pretoria High Court judge ruled. The judge further ruled that 'crypto' 'falls outside the ambit of capital.' The judgement means that any flow of digital assets outside South Africa does not fall within the scope of the country's 'austere exchange control framework – at least for now,' says the local division of American law firm Baker McKenzie in its analysis. Wiehann Olivier, the head of digital assets at consulting firm Forvis Mazars, concurs, noting that the ruling creates a loophole that allows unlimited external transfers of digital assets. 'Currently, you can externalize as much cryptocurrency without any limitation as imposed from the exchange control perspective,' he told local outlet Moneyweb. 'Regulators will act swiftly' The loophole creates an easy workaround for South Africans seeking to move their money offshore. It also plays into the narrative that global central banks have held for years: that digital assets are used to circumvent capital controls, making them susceptible to abuse and criminal use. Experts expect the South African Reserve Bank to act swiftly and fix the flaw in its system. 'Given the risk this presents to the exchange control system as a whole, such legislative action seems inevitable, and it is likely that the Exchange Control Regulations will be amended in short order,' Baker McKenzie says. Olivier believes that even the central bank wasn't aware of the grey area, otherwise it would have plugged the loophole. 'In the background, [SARB] will most likely be making amendments to the exchange control regulations going forward, probably in the next 12-18 months because of the significance of the fact that you can externalize so much money without oversight,' he stated. The primary factor that supported the ruling is that the SARB, like most other central banks, has clarified that digital assets are not legal currencies. Even in pro-crypto nations like Russia, digital asset payments remain prohibited. This oversight could prove costly for South Africa as residents could purchase digital assets en masse and use them to send money offshore unchecked. The need for digital asset regulations in South Africa South Africa has the continent's most advanced digital asset laws, which has allowed regulators to issue licenses to over 200 VASPs. However, the ruling has exposed some of the gaps that still exist. In his ruling, Judge Motha noted that at this point, regulators could no longer claim digital assets as a nascent sector as their defense. 'Cryptocurrency has been in existence for over 15 years, one cannot say SARB has been caught napping,' the judge noted. Desiree Reddy, the South African director at global law firm Norton Rose Fulbright, noted, 'The decision underscores the pressing need for legislative reform to provide clarity and certainty in this rapidly evolving area.' Watch: Tech redefines how things are done—Africa is here for it title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Coin Geek
2 days ago
- Business
- Coin Geek
Could foundation models make RAG obsolete?
Homepage > News > Tech > Could foundation models make RAG obsolete? Getting your Trinity Audio player ready... This post is a guest contribution by George Siosi Samuels , managing director at Faiā. See how Faiā is committed to staying at the forefront of technological advancements here . Even the smartest systems can become outdated if the paradigm shifts. Reid Hoffman recently argued that it's not the end of RAG—Retrieval Augmented Generation. But for those of us watching the evolution of large language models (LLMs) through a sharper lens, the writing might already be on the wall. Just as Yahoo's exhaustive web directory model was outpaced by Google's (NASDAQ: GOOGL) probabilistic search engine, RAG may soon find itself outdated in the face of increasingly powerful foundation models. It's not about whether RAG works. It's about whether it will matter. From Yahoo to Google: A signal from the past To understand the trajectory we're on, we need only look back. Yahoo believed in curating the Internet. Directories. Taxonomies. Human-reviewed indexes. But Google introduced a radically different idea: don't catalog everything—just rank relevance dynamically. Instead of organizing knowledge beforehand, Google inferred what mattered most through algorithms and backlinks. That wasn't just a technological improvement—it was a shift in philosophy. A move from structure to signal. From effortful storage to elegant retrieval. RAG, in many ways, feels like Yahoo. It's a bolted-on system that tries to enhance LLMs by grafting in 'clean,' retrievable knowledge from databases and vector stores. The goal is noble: improve the factuality and trustworthiness of artificial intelligence (AI) responses by injecting it with curated context. But what if that need disappears? Why RAG feels like a transitional technology RAG solves a real problem: hallucination. LLMs, especially in their earlier versions, had a tendency to fabricate facts. By adding a retrieval layer—pulling in external documents to ground the generation—RAG helped bridge the gap between generative flexibility and factual precision. But in solving one problem, it introduces others: Latency and complexity : RAG pipelines require orchestration between multiple components—vector databases, embedding models, retrievers, and re-rankers. : RAG pipelines require orchestration between multiple components—vector databases, embedding models, retrievers, and re-rankers. Data management burden : Enterprises must constantly update and maintain high-quality corpora, often requiring labor-intensive cleanup and formatting. : Enterprises must constantly update and maintain high-quality corpora, often requiring labor-intensive cleanup and formatting. Hard to generalize: RAG systems perform well in narrow domains but can break or return noise when facing edge cases or unfamiliar queries. It feels like scaffolding. Useful during construction—but not part of the finished architecture. Inference is eating Search Recent breakthroughs in LLM capabilities suggest that we're entering a new paradigm—one where inference can increasingly replace retrieval. With the emergence of models like GPT-4o, Claude 3 Opus, and even Google Gemini Pro 2.5, we're witnessing: Longer context windows : These models can now ingest and reason over hundreds of pages of content without needing external retrieval mechanisms. : These models can now ingest and reason over hundreds of pages of content without needing external retrieval mechanisms. Better zero-shot performance : The models are learning to generalize across vast domains without needing hand-fed examples or fine-tuned prompts. : The models are learning to generalize across vast domains without needing hand-fed examples or fine-tuned prompts. Higher factual accuracy: As foundation models train on more comprehensive data, their inherent 'memory' becomes more useful than brittle plug-ins or patched-on sources. In other words, the model itself is the database. This mirrors Google's dominance over Yahoo. When Google proved you didn't need to manually catalog the Internet to find useful content, the race was over. In the same way, when LLMs can consistently generate accurate answers without needing retrieval scaffolding, the RAG era ends. Enterprise blockchain implications So why does this matter to the blockchain and Web3 space? Because the architecture of how we store and surface data is changing. In the past, enterprise blockchain projects focused heavily on data provenance , auditability , and structured information flows . Naturally, RAG-like systems seemed appealing—pair a blockchain ledger (structured, secure) with a retriever that could pull trusted data into AI responses. But if inference can outpace retrieval—if models become so strong that they infer trustworthiness based on deep pretraining and internal reasoning—the value of these data layer bolt-ons will shift. It could go three ways: Legacy enterprise solutions double down on RAG-like hybrids, bolting AI onto databases and chains for compliance reasons. Next-gen startups skip RAG entirely, trusting LLMs' inference power and layering blockchain only for verifiability , not retrieval. A new form of 'self-attesting' data emerges, where models generate and verify their own responses using on-chain signals—but without traditional RAG scaffolding. Blockchain, in this context, becomes a reference point , not a library. The foundation model becomes both the interface and the reasoner. Is clean data still necessary? One of the assumptions keeping RAG alive is this: clean data = better output. That's partially true. But it's also a bit of an old-world assumption. Think about Gmail, Google Drive, or even Google Photos. You don't have to organize these meticulously. You just type and Google finds . The same is starting to happen with LLMs. You no longer need perfectly labeled, indexed corpora. You just need volume and diverse context —and the model figures it out. Clean data helps, yes. However, the new AI paradigm values signal density more than signal purity . The cleaner your data, the less your model has to guess. But the better your model, the more it can intuit even from messy, unstructured information. That's a core shift—and one that should change how enterprises think about knowledge management and blockchain-based storage. RAG's final role: A stepping stone, not a standard So, where does this leave RAG? Likely as a valuable bridge—but not the destination. We'll probably still see RAG-like systems in regulated industries and legacy enterprise stacks for a while. But betting on the future of AI on retrieval is like betting on the future of maps on phonebooks. The terrain is changing. Foundation models won't need retrieval in the way we think about it today. Their training and inference engines will absorb and transmute information in ways that feel alien to traditional IT logic. Blockchain will still play a role—especially in authentication and timestamping—but less as a knowledge base, and more as a consensus layer that LLMs can reference like a cryptographic compass. Conclusion: The search for simplicity RAG helped patch early AI flaws. But patchwork can't match the architecture. The best technologies don't just solve problems—they disappear . Google didn't ask users to understand PageRank. It simply worked. In the same way, the most powerful LLMs won't require RAG—they'll simply respond with clarity and resonance. And that's the signal we should be tracking. In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek's coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI. Watch | IEEE COINS Conference: Intersection of blockchain, AI, IoT & IPv6 technologies title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
Coin Geek
2 days ago
- Business
- Coin Geek
Landless farmers in India reap benefits of CBDC: report
Getting your Trinity Audio player ready... What once seemed like a far-off concept—using a central bank digital currency (CBDC) as an alternative to traditional money—is now becoming a reality in India. Initially met with skepticism, the digital rupee has moved beyond the experimental stage and is actively being used, with the State Bank of India (NASDAQ: SBKFF), the country's largest public sector bank, leading its real-world application. In partnership with the National Bank for Agriculture and Rural Development (NABARD), SBI is delivering agricultural credit through CBDC to tenant farmers—those who cultivate land without owning it—in parts of Andhra Pradesh and Odisha provinces. This initiative goes beyond theory, demonstrating how digital currency can streamline credit delivery, prevent misuse, and ensure that benefits reach genuine cultivators, not middlemen or landlords. According to a Financial Express report, NABARD and SBI are running pilot projects to help landless farmers get access to agricultural loans in select districts of Andhra Pradesh and Odisha provinces. These pilots use the Reserve Bank of India's (RBI) CBDC to offer Kisan Credit Card (KCC) benefits to tenant farmers. SBI is conducting the pilots in Andhra Pradesh's Krishna, East and West Godavari districts, and in Odisha's Cuttack and Puri districts. The initiative aims to prevent misuse of credit by ensuring that loans are used only for farming purposes, such as buying seeds and fertilizers from approved vendors. So far, in FY2025, the report stated that over ₹4.5 crore has been sanctioned under this pilot. In Odisha, 501 tenant farmers have benefited with loan approvals, while in Andhra Pradesh 218 farmers have benefited from the loan sanctions. The report stated that 30–40% of India's cultivated land is currently farmed by tenants who don't own the land. However, KCC loans are usually given only to landowners. Although the government has tried forming joint liability groups to offer loans to landless farmers, banks still face issues verifying who the actual cultivators are. The report stated that under the Modified Interest Subvention Scheme (MISS), KCC holders can borrow up to ₹3 lakh (about $3,508) at a 7% annual interest rate. If the loan is repaid on time, farmers get a 3% interest discount, reducing the effective rate to 4%. From FY2026, the loan limit will increase to ₹5 lakh (about $5,847) per year. KCC loans help farmers meet working capital needs for purchasing agricultural inputs like seeds, fertilizers, and pesticides, as well as for allied sectors like dairy and fisheries. The pilot programs in Andhra Pradesh and Odisha mark a turning point. Using the digital rupee, tenant farmers receive direct benefit transfers (DBT) and agricultural loans. These funds are being used to buy essential inputs like seeds and fertilizers from authorized vendors, ensuring that credit is used for its intended purpose. By integrating digital currency into agricultural credit systems, the initiative offers a transparent, traceable, and efficient way to support the backbone of Indian agriculture: its farmers, especially those without land titles. The initiative also addresses long-standing gaps in rural credit delivery, particularly for tenant farmers, who have historically struggled to access formal loans due to a lack of documentation and land records. With CBDC and digital wallets, these barriers are starting to break down—signaling a shift toward more inclusive, accountable, and tech-enabled rural finance. The RBI started its first digital rupee pilot in the wholesale segment on November 1, 2022, to settle secondary market transactions in government securities. It started the pilot with nine banks—State Bank of India, Bank of Baroda, Union Bank of India, HDFC Bank (NASDAQ: HDB), ICICI Bank (NASDAQ: IBN), Kotak Mahindra Bank, Yes Bank, IDFC First Bank, and HSBC (NASDAQ: HSBC). The retail digital rupee pilot started on December 1, 2022, and users were able to transact through a digital wallet offered by the participating banks and stored on mobile phones or devices. In 2024, India's blockchain-based digital rupee made significant progress as the RBI achieved notable advancements with its CBDC use cases. In December 2024, former central bank Governor Shaktikanta Das said India's CBDC has a lot of potential and is likely to become the future of money. Watch: Finding ways to use CBDC outside of digital currencies title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen="">
