India’s Ministry Of Finance Calls Cryptocurrencies Ponzi Schemes

This Cryptocurrency Has Grown 1000% in a Month and No, it's not Bitcoin!

Cryptocurrencies have existed for almost a decade now, since Bitcoin hit the scene in 2009. And over time now we have seen a slew of cryptocurrencies launch and fail. Nevertheless it’s solely just lately, that a lot of them – fuelled largely by Bitcoin’s skyrocketing worth and the adoption of blockchain expertise – have managed to catch the investor’s eyes, as an alternative choice to typical investments.

And now, India’s Ministry of Finance has launched an announcement cautioning folks towards the dangers of investing in digital currencies corresponding to Bitcoin. The MoF pressured on the truth that cryptocurrencies lack authorities fiat and in contrast them with Ponzi schemes.

This assertion follows a crackdown by the South Korean authorities on buying and selling of bitcoins which led to an 8-percent drop in its worth inside 24 hours. It additionally comes only a week after the Revenue Tax division carried out raids on 9 cryptocurrency commerce exchanges throughout India.

In an official assertion, the ministry mentioned, “There was an outstanding enhance in latest occasions within the value of Digital ‘Currencies’ (VCs) together with Bitcoin, in India and globally. The VCs don’t have any intrinsic worth and usually are not backed by any type of belongings. The value of Bitcoin and different VCs subsequently is completely a matter of mere hypothesis leading to spurt and volatility of their costs.

India’s Ministry Of Finance Calls Cryptocurrencies Ponzi Schemes

The ministry additionally added that bitcoins and different cryptocurrencies aren’t ‘authorized tender’ and so they don’t have authorities authorization. It additionally warned that there’s a actual danger of an funding bubble in VCs of the kind seen in Ponzi schemes which can lead to a sudden and extended crash.

It’s also value noting that the Reserve Financial institution of India (RBI) had already cautioned holders and merchants of VCs thrice concerning the potential monetary, operational, authorized dangers concerned with investing in Bitcoin. Actually, the RBI additionally clarified that it had not given any license/ authorization to any entity/ firm to function schemes or take care of Bitcoin or any digital forex.

Apparently, it’s estimated that India now accounts for over 10 p.c of the worldwide Bitcoin commerce. The cryptocurrency witnessed a staggering development within the final 12 months and is at present standing with over 1,200 p.c in worth.