Bitcoin, Ethereum or NFT will never be legal tenders, crypto doesn’t have govt authorisation: Finance Secretary

Finance Secretary TV Somanathan

Leading cryptocurrencies such as Bitcoin and Ethereum, as well as non-fungible tokens (NFT) will never become legal tender, Finance Secretary TV Somanathan said on February 2.

Similarly, Somanathan added, crypto assets will have no authorisation from the government as their prices are determined privately.

"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 government," the finance secretary said.

Somanathan discouraged investment in crypto assets, saying, "There is no guarantee whether your investment will be successful or not".

"One may suffer losses and the government is not responsible for this," he stressed.

Also Read: Budget 2022 | Government rolls out tax regime for all virtual assets, experts hail move

On the other hand, the digital rupee, whose upcoming launch was announced by Finance Minister Nirmala Sitharaman during he budget speech on February 1, is a safe option for investment, Somanathan said.

"Digital currency will be backed by RBI which will never be default. Money will be of RBI but the nature will be digital. Digital rupee issued by RBI will be a legal tender. Rest all are not legal tender, will not, will never become legal tender," he reiterated.

Apart from the digital rupee, another key announcement made by the finance minister on February 1 was related to the taxation on income derived from virtual assets. Such income will be taxed at 30 percent.

According to the government, 'virtual assets' is proposed to mean any information or code or number or token (not being Indian currency or any foreign currency), generated through cryptographic means or otherwise, by whatever name called. They also include non-fungible tokens (NFTs) and any other tokens of similar nature.