India’s Finance Secretary declares that Bitcoin will never become legal tender

The Finance Secretary in India, T.V. Somanthan stated that cryptocurrencies including Bitcoin and Ethereum will never become legal tender in the country. Only the digital rupee issued by the Reserve Bank of India (RBI) will be a legal tender.

India will not follow El Salvador’s footsteps in adopting Bitcoin

India’s Finance Secretary has declared that cryptocurrencies including Bitcoin, Ethereum and non-fungible tokens (NFTs) will never become legal tender in the country.

India has recently revealed plans to introduce a central bank digital currency (CBDC), the digital rupee, which will be backed and issued by the RBI, which would “never default.” The Finance Secretary added that only the digital rupee will be a legal tender, while the “rest all are not legal tender.”

India’s central bank has been testing its CBDC in the nation for several months to examine its impact on the banking and monetary systems. India’s Finance Minister Nirmala Sitharaman stated that the introduction of a CBDC will lead to a more efficient and cheaper currency management system while boosting the digital economy. 

Somanthan added that cryptocurrencies’ values are “determined between two people,” and similar to diamonds or gold, it does not have the “value authorization by the government.”

The Finance Secretary further warned citizens in India that those who invest in cryptocurrencies should understand that it does not have the “authorization of the government.” He added that those who invest in the new asset class could suffer losses that the government is not responsible for.

While India has struggled to decide whether to ban cryptocurrencies for years, no such ban has been put in motion. However, a 30% tax on digital assets was proposed on income from the transfer of any crypto assets.

However, the nation’s Finance Minister proposed a 1% tax deduction at source on payments created in relation to the purchase of digital assets.