Bitcoin will never become legal tender: Govt

February 02, 2022 17:24

Finance Secy TV Somanathan on cryptocurrency. "Digital currency will be backed by RBI which will never be at default. Money will be of RBI but the nature will be digital. Digital rupee issued by RBI will be a legal tender. Rest are not legal tender and will never become legal tender.

"Bitcoin, Ethereum or NFT will never become legal tender. Crypto assets are assets whose value will be determined between two people. You can buy gold, diamond, crypto, but that will have not have the value authorization by govt.

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

Yesterday, Finance Minister Nirmala Sitharaman said only RBI-issued 'digital rupee' will be recognised as currency and the government will levy 30 per cent tax on gains made from any other private digital assets from April 1.

The finance secretary added that crypto is a speculative transaction, so the tax will be at a 30% rate. "No one knows the real value of Ethereum. Their rate daily fluctuates. One who earns income through crypto will have to now pay 30%. This is the new policy of the government. This is not only for crypto, this is for all speculative income.

"For example, if I take horse racing, that also attracts 30% tax. There is already a 30% tax on any speculative transaction. So we have decided to tax crypto at the same rate."

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