Cryptocurrency won’t be a legal tender by any means, Finance Secretary TV Somanathan told CNBC-TV18 on Thursday and added that it’s absolutely off the cards.
His comment comes days after the development that the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 would be taken up for consideration and passing in the winter session of Parliament.
According to the Bill, India is set to ‘prohibit all private cryptocurrencies, however, it will allow some exceptions to promote the underlying technology of cryptocurrency. The decision has led to confusion among crypto investors.
Somanathan is of the view said that people are reading too much in the brief for listing the crypto bill in Parliament.
“However, one thing I can say very clearly is that crypto will not be legal tender by any means. Gold is not a legal tender, silver is not a legal tender and alcohol is also not a legal tender, beyond that I will not be in a position to say anything more,” he added.
The drafting of the crypto bill is going on right now, he said.
The 2021 cryptocurrency bill has a key difference from the earlier cryptocurrency draft bill introduced in 2019. It omits the words "banning of" in the title. Despite the name change, the main purpose of the bill still seems to be to prohibit the use of cryptocurrencies in the country.
According to the Lok Sabha website, the bill will be introduced "to prohibit all private cryptocurrencies in India, however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses”.
The bill's objective is ill also to "create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India," the bulletin added.
Earlier on Wednesday, former RBI Governor Raghuram Rajan said of the 6000-odd cryptocurrencies in existence today, only one or two, or at most, only a handful would survive.
“If things have value only because they because they will be pricier down the line, that’s a bubble,” Rajan told CNBC-TV18, adding “…a lot of cryptos have value only because there is a greater fool out there willing to buy.”