Digital currency will be backed by the Reserve Bank of India (RBI) which will never be a default. Money will be of RBI but the nature will be digital, said Finance Secretary TV Somanathan.
"Digital rupee issued by RBI will be a legal tender. Rest all aren't legal tender, will not and never become legal tender," Somanathan said.
"Bitcoin, Ethereum, or NFT will never become legal tender. Crypto assets are assets whose value will be determined between two people. You can buy gold, diamond, crypto, but that will have not have the value authorization by government," Finance Secretary added.
People investing in private crypto should understand that it does not have the authorization of the government. There is no guarantee whether your investment will be successful or not, one may suffer losses and government is not responsible for this, Somanathan informed.
Earlier in the day, Prime Minister Narendra Modi said the digital rupee, proposed in the union budget, could be exchanged for cash and will open new opportunities in the fintech sector.
Addressing the 'Atmanirbha Arthavyavastha' (self-reliant economy) symposium organised by the BJP, he said the central bank digital currency or the digital rupee will make online payments more secure and risk free and boost digital economy in the years to come.
"The digital rupee will be the digital form of our physical rupee and will regulated by the RBI. This will be such a system that will enable exchange of physical currency with digital currency," Modi said at the virtual symposium that was attended by chief ministers of BJP-ruled states and party workers across the country.
"Central Bank Digital Currency (CBDC) will strengthen the digital economy... If anyone makes a payment in digital currency, you will be able to change it to cash," he said.
Modi said the launch of CBDC will make digital payments and online transfer of funds more secure and risk-free. "This will also lead to ease in development of global digital payment systems," he said.
He said the digital rupee will revolutionise the fintech sector by creating new opportunities and lessen the burden in handling, printing, logistics management of cash.
Finance Minister Nirmala Sitharaman had announced that India will launch a 'digital rupee' in 2022-23 using blockchain and other technologies.
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