If cryptocurrency owners and investors in India had any doubt about the government’s intentions regarding private digital currencies, they can now be assured that their private crypto assets will never be legalised in India.
If at all, private cryptocurrencies are about to meet with stiff competition from what is currently being referred to as ‘Digital Rupee’, to be launched this fiscal year by the Reserve Bank of India using blockchain technology. Digital Rupee will be the only legal digital tender in the country, and it will have the government’s backing. Private cryptocurrencies are nearing the end of their run in India.
T.V. Somanathan, the finance secretary for the Indian government, made it clear that private cryptocurrencies like Bitcoin have no future in India. Somanathan said that a digital rupee backed by the Reserve Bank of India, or RBI, will be accepted as legal tender, but major cryptocurrencies have no chance of doing so. He added, “Rest all aren’t legal tender, will not, will never become legal tender. Bitcoin, Ethereum or NFT will never become legal tender…You can buy gold, diamond, crypto, but that will have not the value authorization by government.”
If private cryptocurrency owners and investors had any doubts about the government’s intentions still, here’s what the finance secretary also had to say: “People investing in private crypto should understand that it does not have the authorization of government. There is no guarantee whether your investment will be successful or not, one may suffer losses and government is not responsible for this.”
Time to Sell Bitcoin Now
Do you own Bitcoin? Well, it’s time to get rid of all such crypto coins now. They will soon turn valueless. Once Digital Rupee hits the Indian system, there is no guarantee that private coins like Bitcoin, Ethereum will hold any value. At that time, it will become impossible for Indian investors and crypto holders to win back the money they had put in to buy such coins. To top it all, they would have no legal recourse, and their finances will simply vanish.
Once Digital Rupee is launched with the solid backing of the government, a sea of Indians will turn to it, and that will immediately impact the fortunes of private coins in the country. Their value will evaporate, and they will become worthless. So, it makes sense for all crypto holders to sell their assets while they still can, and begin gearing up for the launch of India’s official digital currency that will use blockchain technology as well.
The digital rupee or Central Bank Digital Currency (CBDC) will give a big boost to the digital economy and India would be the first major country to officially launch its currency in such a manner. According to finance minister Nirmala Sitharaman, “Digital currency will also lead to a more efficient and cheaper currency management system.” So, India is indeed embracing digital currencies; just not the private ones that can be used for funding terrorism, effectuating corruption and employed in criminal activities of a wide colour palette.
To top it all, finance minister Nirmala Sitharaman on Tuesday announced a 30 per cent tax on any income from the transfer of virtual digital assets, specifying that no deductions and exemptions will be allowed. She said, “Any income from virtual digital assets is taxable at 30 per cent. There will be no deduction with exception of the cost of acquisition. The TDS is applicable beyond a specified monetary threshold, and the gift of virtual currencies is taxable in the hands of the recipient.”
Suddenly, cryptocurrencies don’t seem very lucrative, right? Well, there’s more.
Budget 2022 is Death for Cryptocurrencies
Private cryptocurrencies in India are about to die. Guess who has predicted so? None other than India’s market bull, Rakesh Jhunjhunwala. When Rakesh Jhunjhunwala says something like this, you sit up straight and take notes. Here’s what he told CNBC TV-18.
“I think what government wants to do is that it wants the Reserve Bank of India (RBI) to promote digital currency and kill all other currencies, just like China is doing, which in a way is the right approach also.”
Highlighting the point further, he explained that Budget 2022 has made RBI the sole authority capable of promoting digital currency, thereby killing all other cryptos in the process.
Therefore, it is no longer viable, leave alone profitable, to keep holding on to crypto coins. Their demise in India is now imminent, and it’s time for all holders and investors to get the baggage off their backs as soon as possible.