Bitcoin, Ether and NFT 'will never be legal tender' in India, says finance secretary

TV Somanathan, the finance secretary of the Indian government, reportedly pushed back against the narrative that cryptocurrencies would b...



TV Somanathan, the finance secretary of the Indian government, reportedly pushed back against the narrative that cryptocurrencies would be widely accepted in the country – dismissing the possibility of using them as legal tender.

According to a Wednesday tweet from Asian News International, Somanathan noted that a digital rupee backed by the Reserve Bank of India, or RBI, will be accepted as legal tender, but major cryptocurrencies have no chance of doing so. The finance secretary added that because digital assets, including bitcoin (BTC) and Ether (ETH) do not have government authorization, they are likely to remain “goods whose value will be determined between two people”.

“The digital rupee issued by RBI will be legal tender,” Somanathan said. “The fact remains that not everything is legal tender, will not become, will never become legal tender. Bitcoin, Ethereum or NFT will never be legal tender […] You can buy gold, diamond, crypto, but it will not have the authorization value by the government.

The Finance Secretary added:

“People who invest in private crypto should understand that it does not have government permission. There is no guarantee that your investment will succeed or not, losses may be incurred and the government is not responsible for them.

Somanathan’s words followed Indian Finance Minister Nirmala Sitharaman’s announcement on February 1 that the country planned to launch a central bank digital currency, or CBDC, by 2023, adding that it could provide a “big boost” to the digital economy. She also proposed that transactions in digital assets be taxed at a rate of 30%.

Related: India Misinterpreted Private Crypto Ban, Claims Creator of Crypto Bill

Indian lawmakers have already introduced a bill that could have banned the use of “private cryptocurrencies” in the country. However, a Tuesday bulletin from India’s lower house of parliament showed the legislation was not being considered in its budget session until May. Instead, the government announced training event for lawmakers regarding crypto and its effects on the economy.