Finance secretary Somanathan said that “crypto will never be a legitimate currency”. according to the law, legitimate currency means that it will be accepted in the settlement of the debt. India will not make any crypto assets a legitimate currency. only the digital rupee of the reserve bank of India will be the legal tender in the country.”
Making things clear on the legality of cryptocurrencies, finance secretary Somanathan on Thursday said that the private digital currency will never become a legal currency. finance minister Nirmala Sitharaman, in the 2022-23 budget presented in parliament this week, proposed a 30 per cent tax on profits on transactions in cryptocurrencies and other digital assets, as well as one per cent on transactions beyond a limit. it also announced the imposition of TDS (tax deduction at source).
Somanathan told that just as gold and diamond are not legal tenders despite being valuable, private cryptocurrencies will never be legal currency. “crypto will never be a legitimate currency. according to the law, legitimate currency means that it will be accepted in the settlement of the debt. India will not make any crypto assets a legitimate currency. only the digital rupee of the reserve bank of India will be the legal tender in the country.”
only el-salvador in the world has accepted bitcoin as a legitimate currency in september last year. crypto has not received the status of a legitimate currency in any other country.
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discussions are on to make rules for crypto currency in the country. but no draft has been released so far. meanwhile, the central bank’s digital currency will come into operation from the next financial year.
asked if the talk of bringing a bill on regulation of crypto assets in the winter session of parliament was included in the functioning of parliament but this is not the case in the current budget session, Somanathan said, “it was felt that it needs to be widely discussed before bringing a law on crypto. the purpose of this discussion is to look into whether it requires regulation.”
the finance secretary said, “our system is democratic. in a democracy, the government starts something but then there is a reaction. the government is listening to that response and the basis of that has not yet reached a final conclusion…. meanwhile, since transactions in crypto and other digital assets were constantly increasing, tax clarity was needed.”