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India has always been one of the few countries that have expressed hostility towards cryptocurrencies as a threat to the nation’s economy. In a public speech a few months ago, the prime minister of India, Narendra Modi, expressed the government’s stance against decentralized finance. Amidst suspicions about a centralized digital currency, the recent budget announcement confirmed that India would indeed release its own cryptocurrency.
In an interview following the announcement, TV Somanathan, the finance secretary of India, expressed some discouraging opinions against cryptocurrencies. He firmly asserted that Bitcoin, Ethereum, or any other crypto project for that matter would never be a legal tender in India. As these currencies are priced privately, the Indian government will never authorize them as legally tradable assets. He encouraged investments in diamond, gold, and other commodities as they are centrally priced and authorized by the government.
As the government does not interfere, there is no guarantee for return in cryptocurrencies like BTC or ETH. Moreover, the government will not be responsible for any loss that one faces due to such investments. So before investing in crypto, you should be aware of its risk; also, you can check experts’ opinions by clicking here if you want to invest in bitcoin. The hostility also extended towards non-fungible tokens as their policies covered anything created with cryptographic means. It basically means that any asset which is not produced under a central authority will never be a legal tender in India.
On the other hand, the budget announcement by Finance Minister Nirmala Sitharaman mentioned an Indian Digital rupee. This digital currency will be released by the Reserve Bank of India and the finance secretary seemed unusually confident about this ‘cryptocurrency’. He claimed that it will be the safest option for anyone interested in digital currency trading.
The currency would be created, launched, and overseen by the RBI, but the nature of the coin is set to be digital. During the interview, it was emphasized that this digital currency will be the only one to be recognized as a legal tender, and any projects will forever stay out of the boundaries of legality in India. Another important announcement that saddened the crypto community is the taxation on income through virtual currencies. The tax percentage for cryptocurrencies is set at 30%. This taxation policy will apply to all the other speculative incomes as well, like gambling and betting.
However, investors are not sure how these policies would be implemented, given the daily fluctuations in the market. Even gifts through these virtual currencies are said to be under the 30% taxation policy. These policies are highly discouraging to the crypto community and market in India. Experts say that these policies are devised to propel the upcoming digital currency by the RBI. We will have to wait to see how this impacts the value of cryptocurrencies in the market.
