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Indian Finance Ministry: Cryptocurrencies Are 'Like Ponzi Schemes'

Dec 30, 2017 Posted /  4903 Views

Indian Finance Ministry: Cryptocurrencies Are 'Like Ponzi Schemes'

The government of India was already in doubts about cryptocurrency has now Increased its pace towards this virtual world of money.

India's Ministry of Finance issued a statement  and warned residents against the risks associated with trading cryptocurrencies, calling blockchain-based assets like Ethereum , Ripple , Bitcoin etc scams." It's the third warning this year from a government body in India.

Reserve Bank of India has issued two similar warnings in 2017, once in February and other this December,Showing no support to cryptocurrencies holders and traders.

The new statement from the Finance Minister yet again indicates how government is responding to the worldwide spike in the price of various cryptocurrencies.

"The price of bitcoin and other [virtual currencies] therefore is entirely a matter of mere speculation resulting in spurt and volatility in their prices. There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes... Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes."

The Ministry with clear its intention and thoughts emphasized that India doesn't recognize any cryptocurrency as a legal tender and that no license is issued in the country to authorize any cryptocurrency exchange. Therefore, users have to bear the potential financial, operational, legal and security related risks when investing in cryptocurrencies, it said.

Something which is also catchable is the endless discussion in India whether and how cryptocurrencies should be  legalized and rotated in the country.

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Supreme Court of India has already recommended various government agencies to respond to an online petition that demands a proper regulation over bitcoin. In August a cryptocurrency regulation proposal had been submitted to the Finance Ministry, but the regulation still remains unclear.

If the statements will be ignored on the continuous basis the action by Government of India against cryptocurrency bubble is inevitable .

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Tags: Finance Ministry Cryptocurrencies bitcoin

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