Bitcoin, Ethereum, Or NFTs Won’t Become Legal Tender, Says FM Nirmala Sitharaman

During the announcement of the Union Budget 2022-23 on Tuesday, Union Finance Minister Nirmala Sitharaman revealed the government’s plan to tax cryptocurrency transactions.

In response to a question at the post-budget press conference, Sitharaman stressed that the proposed tax will be imposed on any revenue derived from digital assets and that the government has not taken a position on the legality of cryptocurrencies in general.

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Reportedly, Finance Secretary TV Somanathan, meanwhile, put a stop to the rumors on Wednesday, saying that the government has no plans to make private cryptocurrencies official tender.

“Bitcoin, Ethereum, or NFT would never become legal tender,” the Finance Secretary said.

“Crypto assets are assets whose value is decided by a two-person auction. You can invest in gold, diamonds, and cryptocurrency, but the value will not be authorized by the government.”

According to Somanathan, crypto assets are assets whose value is defined between two individuals; you may buy gold, diamonds, and crypto assets, but the government will not approve their worth.

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People who invest in private crypto should be aware that it is not backed by the government. He stated that there is no assurance that your investment will be profitable or unsuccessful, and that one may lose money for which the government is not liable.

The Finance Secretary explained that just because something isn’t legal doesn’t imply it’s criminal.

The government has also established a cryptocurrency tax scheme, proposing a 30% fee on earnings from trading cryptocurrencies like Bitcoin and Ethereum, as well as non-fungible tokens.

The Cardano block size will increase by 11%. Although investors may finally breathe a sigh of relief after months of speculations about a possible blanket ban, some have mistakenly concluded that the government providing clarification on cryptocurrency taxes equates to bitcoin legalization.

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On Tuesday, Sitharaman went on the record to say that the new tax structure does not imply that cryptocurrencies are now legal tender. Consultations on cryptocurrency laws are still ongoing, according to the finance minister.