Finance Minister Nirmala Sitharaman`s proposal to tax virtual assets has sparked a debate about the legality of cryptocurrencies in India. While many have welcomed the decision to tax digital currencies because they believe it is the first step towards the recognition of virtual currencies, the government has yet to clarify whether currencies like Bitcoin can be considered legal tender in India. “Currently, we have no clarity on cryptocurrency as to whether it is business income, capital gain, or speculative income. Some people declare their crypto assets, others don`t. Now the flat rate will be 30 percent tax,” the official said. Somanathan said the digital rupee is backed by the RBI, which will never fall behind. “The money will come from the RBI, but nature will be digital. The digital rupee issued by the RBI will be legal tender. We can buy non-digital assets with the digital rupee, like we buy ice cream or other things with our wallet or payments through the UPI platform. A month later, more Salvadorans have bitcoin wallets than traditional bank accounts, and the most popular bitcoin wallet – the officially government-sponsored Chivo wallet – has been downloaded by three million people, representing 46% of the population. [44] However, only 12% of Salvadoran consumers used the cryptocurrency, and 93% of the companies surveyed said they had not received any payments in Bitcoin in the first month.
[45] According to a tweet from Asian News International on Wednesday, Somanathan said a digital rupee guaranteed by the Reserve Bank of India (RBI) would be recognized as legal tender, but important cryptocurrencies would not. Since digital assets such as Bitcoin and Ethereum do not have government approval, they will likely remain “assets whose value is determined between two people,” according to the finance minister. The Autorité des marchés financiers (FMA) has warned investors that cryptocurrencies are risky and that the FMA does not monitor or regulate virtual currencies, including Bitcoin, or cryptocurrency trading platforms. [14]: 30–31 Legal tender is a form of currency, including cash, coins, bonds, that is legally accepted as a means of payment – however, Finance Minister TV Somanathan said today that cryptocurrencies such as Bitcoin or Ethereum will never be legal tender. In an interview, Somanathan said that just as gold and diamonds, while valuable, are not legal tender, private cryptocurrencies will never be legal tender. The digital rupee to be launched by the Reserve Bank of India (RBI) will be legal tender, he said. On December 7, 2017, Bank Indonesia, the country`s central bank, issued a regulation banning the use of cryptocurrencies, including Bitcoin, as a means of payment as of January 1, 2018. [14] On November 11, 2021, the Indonesian Ulema Council issued a Haram fatwa against the use of cryptocurrencies as currency, including bitcoin, invoking both Islamic laws and Indonesian banking and monetary regulations.
The fatwa also prohibits the trading and holding of cryptocurrencies unless these cryptocurrencies meet Islamic Sil`ah standards for exchangeable and possessable goods, such as physical form, clear value, known number, can be truly owned, transferable and not entirely speculative. [112] He said, “The digital currency is backed by the RBI, which will never be a default. The money will come from the RBI, but nature will be digital. The digital rupee issued by the RBI will be legal tender. The rest of all (Bitcoin and others) are not legal tender and will never be legal tender. Bitcoin was legal in Mexico as of 2017, with plans to regulate it as a virtual asset through FinTech law. [38] In January 2022, coinciding with an energy crisis, Kosovo banned all cryptocurrency mining. According to BBC News, cryptocurrency mining is “particularly popular in the northern regions of Kosovo, where ethnic Serbs do not recognize state independence and refuse to pay electricity bills.” [154] On May 21, 2020, Albania passed a new law regulating cryptocurrency activities. [150] In North Macedonia, there is no specific legislation on bitcoins or cryptocurrency. “Crypto will never be legal tender.
Legal tender means that it is accepted by law to settle debts. India will not produce crypto assets as legal tender. Only the Reserve Bank`s `digital rupee` will be legal tender in India,” Somanathan said. With the exception of El Salvador, which adopted Bitcoin as its legal tender in September last year, no other country has made cryptocurrency legal. In September 2017, the Bank of Namibia published a position paper on virtual currencies entitled[27], in which it stated that cryptocurrency exchanges are not allowed and that cryptocurrency cannot be accepted as a means of payment for goods and services.