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The cryptocurrency will not be legal tender in any way, Finance Secretary TV Somanathan told CNBC-TV18 exclusively on Thursday, adding that it is absolutely out of the question.

His comment comes days after the development that the 2021 bill on cryptocurrencies and regulation of the official digital currency would be taken for consideration and approval in the winter session of Parliament.

Under the bill, India is prepared to ‘ban all private cryptocurrencies, however it will allow some exceptions to promote the underlying cryptocurrency technology.’ The decision has caused confusion among cryptocurrency investors.

Somanathan thinks that people are reading too much into the report to get the encryption bill in Parliament.

“However, one thing I can say very clearly is that cryptocurrencies will not be legal tender in any way. Gold is not legal tender, silver is not legal tender and alcohol is not legal tender, beyond that I will not be in a position to say anything else, “he added.

The 2021 cryptocurrency bill has a key difference from the previous cryptocurrency bill introduced in 2019. Omit the words “ban on” in the title. Despite the name change, the main goal of the bill still appears to be to ban the use of cryptocurrencies in the country.

According to the Lok Sabha website, the bill will be introduced “to ban all private cryptocurrencies in India, however, it allows certain exceptions to promote the underlying cryptocurrency technology and its uses.”

The aim of the bill is also “to create an enabling 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 that out of the 6,000 cryptocurrencies that exist today, only one or two, or at most, only a few would survive.

“If things have value just because they will be more expensive in the future, that’s a bubble,” Rajan said. CNBC-TV18, adding “… many cryptocurrencies have value only because there is a bigger fool who is willing to buy.”

(Edited by : Kanishka sarkar)

First published: IST



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