Crypto Will Never Be Legal Tender- India’s Finance Secretary
India’s Union budget announcement on 1st February 2022 has made many revelations in the digital assets sector. Two main announcements were the upcoming introduction of a Digital Rupee, and the other was a 30% tax on digital assets along with a 1% TDS on transactions made using such assets.
Today, complying with RBI’s anti-crypto stand, the Finance Secretary of India, T. V. Somanathan has made a statement that digital assets like Bitcoin (BTC), Ethereum (ETH), and Non-Fungible Tokens (NFTs) will never be accepted as a legal tender in India. He also clarified that the Digital Rupee, which will be released on the blockchain technology by the Reserve Bank of India, will not provide support to such assets. This has laid enough emphasis on the fact that any crypto assets will not have the government’s backing, at least not any time soon. By the way, it is not just crypto assets but also valuables like gold and diamonds which will not have “value authorization” by the government.
Countries all over the world have been thinking of concrete ways to monitor and also regulate the crypto industry. This market is extremely volatile and also faces many scams and dupes time to time. China and America had mentioned their plans of regulation of the industry, stating the risk to financial stability and economic welfare of their country. Although, Brazil is way ahead in this game. Its cities like Rio de Janeiro, have been talking about including Bitcoin in their government treasury.
The warning issued by Finance Secretary T. V. Somanathan specified, “Talk of whether or not to adopt Bitcoin as legal tender have already occurred in India. Last November, the nation’s Finance Minister, Nirmala Sitharaman, said that the Indian government had no plans to grant Bitcoin status as a legal currency while in a Parliamentary session. Regulators in India have grappled with the possible banning of cryptocurrencies for years.” He further stated about a draft bill that was put forth in 2019 which was about banning Crypto assets usage, and a similar draft put out in 2021. “No such ban has been instituted, though regulation has been proposed. Just yesterday, a 30% tax on crypto assets was proposed, and plans were detailed for the issuance of a central bank digital currency.” With this, it is clear that India still stands on its anti-crypto sentiment.