The Indian Ministry of Finance claims that bitcoin and other digital currencies are just like Ponzi schemes and that investors should be extremely cautious when investing in them.
In a recent statement, the Ministry said the cryptocurrencies do not have the intrinsic value and they are not supported by any asset. The Ministry thinks the only reason for the growth of the prices on the cryptocurrency market is speculation.
According to the statement, there is a real and increased risk of the investment bubble on the cryptocurrency market, which is similar to the risk that Ponzi schemes bring along. This can lead to an instantaneous and prolonged fall when investors could lose all their money.
The Indian government still needs to create regulations for the cryptocurrency market, but an interdisciplinary board to research and develop the regulatory frame has already been created.
Reserve Bank of India, the central bank of the country, is one of the members of the board.
In the meantime, the Indian Supreme Court issued a call to the government to start creating a regulatory frame to control the flow of bitcoin in the country.
Despite its recent warning, the Ministry of Finance has not implemented the complete ban of cryptocurrency trading and has not announced any measures which would limit the adoption and trading with cryptocurrencies in India.