Crypto will never become legal tender in India: Finance Secretary

The official also cautioned citizens that private crypto is not authorised by the government

Indian Finance Secretary TV Somanathan stated that major cryptocurrencies including Bitcoin and Ethereum have no chance of being recognised as legal tender in the country.

The comment comes a day after the Modi government announced that India will not be imposing the widely-discussed blanket ban on cryptocurrencies. The country will instead tax all profits via crypto transactions at 30%, Finance Minister Nirmala Sitaraman stated during the budget session of the parliament.     

In a statement to Asian News International, Somanathan explained that while the Reserve Bank of India-backed Digital Rupee will be recognised by the government, crypto tokens and NFTs will remain as assets whose value will be determined between two people.

“The rest [assets other than the Digital Rupee] aren't legal tender, will not, will never become legal tender. Bitcoin, Ethereum or NFT will never become legal tender. You can buy gold, diamond, crypto, but that will have not the value authorization by the government,” said Somanathan.

He further warned that the government’s decision to not ban digital assets must not be seen as supportive of the idea that crypto will be widely used in India. 

“People investing in private crypto should understand that it does not have the authorization of government. There is no guarantee whether your investment will be successful or not, one may suffer losses and government is not responsible for this. 

However, despite the hesitancy towards crypto, India continues to make wide strides towards digitisation.  

Yesterday, the country confirmed its plans for a central bank digital currency, the Digital Rupee, which will be designed to provide a “big boost” to India’s digital economy. Further, Sitaraman announced that India’s Digital Rupee will be launched by 2023.

The government also held a training event for officials on cryptocurrencies and its impact on the economy last year.