The official also warned citizens that private cryptocurrency is not authorized by the government.

India's Finance Secretary TV Somanathan stated that major cryptocurrencies, including Bitcoin and Ethereum, have no chance of being recognized as legal tender in the country.

The comment comes a day after the Modi government announced that India will not impose the widely discussed blanket ban on cryptocurrencies. Instead, the country will tax all profits through cryptocurrency transactions at 30%, Finance Minister Nirmala Sitaraman said during the budget session of parliament.

In a statement to Asian News International, Somanathan explained that while the Reserve Bank of India-backed Digital Rupee is recognized by the government, crypto tokens and NFTs will remain assets whose value will be determined between two people.

“The rest [assets other than the Digital Rupee] are not legal tender, no they will never become legal tender. Bitcoin, Ethereum or NFT will never become legal tender. You can buy gold, diamonds, cryptocurrency, but it will not have the amount authorized by the government, ” Somanathan said.

He further warned that the government's decision not to ban digital assets should not be seen as supporting the idea that cryptocurrencies will be widely used in India.

“People who invest in private cryptocurrencies should understand that they do not have government authorization. There is no guarantee whether your investment will be successful or not, losses may be incurred and the government is not responsible for this.  

However, despite the hesitation towards cryptocurrencies, India continues to make great strides towards digitization.

Yesterday, the country confirmed its plans for a central bank digital currency, the Digital Rupee, which will be designed to provide a “big boost” to India’s digital economy. Furthermore, Sitaraman announced that India's Digital Rupee will be released by 2023.

The government also held an employee training event on cryptocurrencies and their impact on the economy last year.

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