Digital currency will have RBI backing, but not Bitcoin, Ethereum or NFT: Centre
New Delhi, Feb 2: The Union Finance Ministry on Wednesday stated that digital currency issued by the Reserve Bank of India (RBI) will be backed by the government and it will be a legal tender, but not private cryptos like Bitcoin or NFT.
Addressing the media, Finance Secretary TV Somanathan warned people those investing in private crypto that it does not have the authorisation of the government and there is no guarantee whether their investment will be successful or not and the government is not responsible if people suffer losses.
"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," Finance Secretary TV Somanathan.
Digital currency will be backed by RBI which will never be default, he said. "Money will be of RBI but the nature will be digital. Digital rupee issued by RBI will be a legal tender. Rest all aren't legal tender,will not,will never become legal tender," Somanathan added.
According to the finance ministry, Crypto is a speculative transaction, so the government is taxing it 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 govt," Finance Secretary TV Somanathan added.
The government on Tuesday in the Union Budget 2022-23 announced that India will have its own digital currency soon and it will be issued by the Reserve Bank of India (RBI) in 2022-23 using blockchain technology.