Cryptocurrencies aren’t ‘legal tender’ in India and they don’t have government authorisation.
India’s finance ministry cautioned the country’s investors against investing or trading in Bitcoin and other cryptocurrency, saying they are just elaborate Ponzi schemes. This danger exists in large part because grasping even the basics of blockchain technology remains daunting for non-specialists, it said.
In a statement issued today, the Indian finance minister stated that “There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes, which can result in sudden and prolonged crash and result in retail consumers losing their hard-earned money. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes.”
He added that cryptocurrencies aren’t ‘legal tender’ and they don’t have government authorisation.
India’s finance minister recently appointed a dedicated panel that was tasked with examining the existing framework of cryptocurrencies and to come out with measures for dealing with the digital assets. The government-appointed panel was given three months to submit its reports on issues relating to consumer protection and money laundering.
The panel has still to decide on how the government can consider bringing in legislation to stop crypto transactions and which body will have regulatory oversight over cryptocurrencies.
Another government committee has recommended that India’s authorities take immediate steps to shut down the country’s cryptocurrency exchanges, saying that the use of Bitcoin and the like could result in a breach of anti-money laundering provisions.
Participants in India’s bitcoin market expressed their disappointment as they were hoping for some form of a legislation to regulate the activities of local exchanges.