From the last quarter, there is no single space on the internet where news related to bitcoin is not discussed. Whether you open your Facebook feed or open any random tweets you may hear lots of news about how people become the millionaire by investing in bitcoin in short span of time. But wait if you are in you should know whether it is legal to invest in bitcoin or not.
The finance ministry cautioned investors about the risks of trading in cryptocurrencies such as bitcoin, saying digital currency investments are like “Ponzi schemes.” Cryptocurrencies are not legal tender and have no regulatory permission or protection in the country, the finance ministry said in a statement, but stopped short of announcing an outright ban or imposing any curbs. Investors and other participants dealing with such digital currencies are doing so “entirely at their risk and should best avoid participating therein,” the statement said. “There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes”, with investors risking a sudden and prolonged crash, the statement said.
India currently has no regulation for cryptocurrencies, and like other global policymakers, it is seeking to understand how to supervise a market that many feels are a speculative bubble.
The Indian government and RBI are not the only ones to caution investors against cryptocurrency. Leading financial analysts and economist has also raised the red flag against it. Business magnate Warren Buffett called it a ‘real bubble’. Garrick Hileman, a research fellow at the University of Cambridge’s Judge Business School, earlier said: “What’s happening right now has nothing to do with Bitcoin’s functionality as a currency – this is pure mania that’s taken hold.”