The Indian government has continued its negativity against Cryptocurrencies. The government finance ministry has warned its citizen against involving themselves with cryptocurrencies. The ministry actually compared cryptocurrencies to a Ponzi scheme. This current warning is not the first one from Indian government agencies. This is actually the third warning about cryptocurrencies this year alone. There has also been increased concern about virtual currencies among the country’s top regulatory sending a warning that tough regulations may be on the way.
The reserve bank of India has previously issued a warning about investing in cryptocurrency about and especially Bitcoin. The bank is seeing virtual currencies as very risky to invest in. It actually issued a warning in February and another one in December to investors who seem not to be listening to this warnings.
The current warning by the Ministry of Finance shows that the government is very keen on the growing market of digital currencies. In their statement:
“Bitcoins price and the price of other cryptocurrencies are going up because they are controlled by speculation. This speculation stirs the volatility of this currencies. The risk is very high when investing in this type of seen bubble in Ponzi schemes. Investors should be alert and very cautious to avoid being trapped into this Ponzi schemes.”
The Indian ministry also went on to explain that the government does not recognize any digital currency as a legal tender. More to that it said that no license had been issued by the country to allow any cryptocurrency exchange company to operate in India.
These statements were seen to be directed to the trading exchanges in the country. This comes during a time when statistics show that the biggest exchange company in the country enjoys a $115 million within 24 hours.
Apart from this warnings there has been heated discussions in the country about regulating the booming cryptocurrency market. A petition had been taken to court about the same, and the Supreme Court told the government agencies to respond to the online petition that demanded regulations. This led to the submission of a regulation proposal to be submitted to the Indian Finance Ministry. The regulation time in the country is, however, remaining unclear as the ministry has not communicated.
Even with regulation pending the statements from the government indicate that very restrictive regulations may be coming. Restrictions are good, especially when protecting the interest of the investor. So instead of governments discouraging technology they should study and understand it.