India's Finance Secretary Says Crypto Will Never Be Legal Tender
A crypto ban in India seems less likely lately but so, too, does its adoption as legal tender.
- T.V. Somanathan, Finance Secretary of India, has said that crypto assets like BTC, ETH, and NFTs will never become legal tender.
- He also said that the Reserve Bank of India would never default and that the coming digital rupee would have its backing.
- India’s Parliament has grappled with whether to ban cryptocurrencies in the past.
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India’s Finance Secretary, T.V. Somanathan, has said that cryptocurrencies will never become legal tender in India. Among other things, he emphasized that crypto assets do not have the government’s backing.
India’s Finance Secretary Speaks Frankly
India’s Finance Secretary has thrown cold water on any hopes that India might soon follow in El Salvador’s footsteps in adopting Bitcoin as legal currency.
According to Asian News International, T.V. Somanathan, India’s Finance Secretary, has said that cryptocurrencies including Bitcoin and Ethereum, as well as crypto assets like NFTS, “will never become legal tender.” On India’s recently announced plans to bring a central bank digital currency, Somanathan emphasized the robust nature of the Reserve Bank of India, which will back and issue the digital rupee, saying it would “never” default.
He stated his view that crypto assets’ value would be “determined between two people,” and also that, like crypto assets, neither diamonds nor gold would “have the value authorization” of the government.
The Finance Secretary of the nation of over 1.3 billion people issued a warning:
“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.”
Talks 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. In 2019, a draft bill was put forward seeking to ban cryptocurrency usage, making it punishable by up to a decade in prison. In Jan. 2021, a similar bill was put forward for deliberation in Parliament—so too last November.
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.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.