India’s J&K state warns investors against cryptocurrency investing
Authorities in the north Indian state of Jammu and Kashmir (J&K) have issued a statement warning investors of the perils of investing in virtual currencies, as reported by the Business Standard on January 2.
The J&K police warned investors that virtual currencies are in no way backed by the legal tender of the government or other financial institutions.
“The general public is informed not to make any type of investment in cryptocurrencies, virtual currencies (vcs) such as Bitcoin [BTC]because there is a real and heightened risk associated with them,” stated an advisory by the Inspector General (IG) of the crime branch.
Furthermore, the authorities stated that this could eventually result in a “sudden and prolonged crash,” which would especially affect the retail customers. The IG advised the public to be alert against the fraudulent cryptocurrency schemes.
India’s central bank, the Reserve Bank of India (RBI) strictly does not provide any licenses to finance or other companies to operate or deal in Bitcoin or other related cryptocurrencies. Hence, there is no separate regulatory protection for virtual currencies in the South East Asian country.
Earlier in 2018, the Indian government enforced a cryptocurrency ban, which stated that no banking institutions could provide or support cryptocurrency-related operations. This has led to several crypto-centric companies in the country, falling out of the frame, the exchange and wallet provider Zebpay was forced out due to the RBI ban.
The RBI is also looking to create a central bank digital currency (CBDC) or the “crypto-rupee,” however plans for the same have been delayed. Last year, the central bank set-up an interdepartmental group to study the prospects of the “crypto-rupee.”
With reference to the above, the Hindu, a local news daily, reported unidentified sources stated, “The government doesn’t want the digital currency anymore. It thinks it is too early to even think about a digital currency.”
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