Cryptocurrencies like Bitcoin or Ethereum will never become legal tender, Finance Secretary TV Somanathan told ANI, adding that only the digital rupee issued by the Reserve Bank of India (RBI) will be legal tender.
Speaking to ANI, the Finance Secretary said, “Digital Rupee will be backed by RBI which will never default. The money will be reserve Bank of India But nature will be digital. The Digital Rupee issued by RBI will be a legal tender. We can buy non-digital assets with Digital Rupee like we buy ice cream or other things using our wallet or pay through UPI platform.
“Everything else is not a legal tender, will never become a legal tender. Bitcoin, Ethereumor a picture of the actor becomes NFT Will never become legal tender,” he said. bitcoin price in india Till 6:49 PM IST Rs. 30.84 lakh, while ethereum price in india stood at Rs. 2.23 lakhs.
Somanathan said that crypto assets are assets whose value is determined between two people, you can buy gold, diamond and crypto assets, but that value will not be authorized by the government.
People investing in private crypto should understand that it does not have the authority of the government. There is no guarantee that your investment will be successful or not, one may lose money and the government is not responsible for it, he said.
The Finance Secretary clarified that things which are not legal does not mean that they are illegal.
“I am not saying that bitcoin or ethereum is illegal, but it is also not illegal. But I can say that if regulation comes cryptocurrency Even then it will not be legal tender,” Somanathan said.
Somanathan said the regulation may demand KYC, vendor’s license, but will be decided later by the government in consultation with the stakeholders. He said that we will also see what is happening in other countries.
Elaborating on the digital rupee in more detail, Somanathan said that the digital rupee will not be like bitcoin and ethereum.
Somanathan further added, “Through Digital Rupee you do your transactions in the same way as you are currently doing through your Digital Wallet like Paytm, UPI. Digital Rupee is a legal tender and is equivalent to the cash payments we make.”
The Finance Secretary also clarified about the 30 per cent tax rate on digital asset transfers. He said that any income other than agriculture is taxable as per the policy of the government.
“We currently do not have clarity on cryptocurrency, whether it is business income, capital gains or it is a speculative income. Some people declare their crypto assets, some do not. Now from April 1, 2022, per month A uniform rate of 30 per cent tax will be applicable on transfer of digital assets.
“It is not just for crypto, it is for all speculative income. For example, if I take horse racing, that too is taxed at 30 percent. There is already a 30 percent tax on any speculative transaction. That’s why we have decided to tax crypto at a single rate. Crypto is a speculative transaction, so we are doing it at 30 per cent,” Somanathan said.
“No one knows the real value of Ethereum. Their rate fluctuates daily. Anyone earning income through crypto will now have to pay 30 percent. This is the new policy of the government,” he said.