Arun Jaitley says virtual currencies like Bitcoin not a legal tender in India

Finance Minister said consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes

Jaitley said Virtual ‘Currencies’ (VCs)/ Cryptocurrencies are neither currencies nor coins (Images: AFP/ FILE)

NEW DELHI: Finance Minister Arun Jaitley on Tuesday clarified that Bitcoin is not a legal tender in India and the investor is entirely at their own risk. They should, therefore, best avoid participating therein. The Finance Ministry said in a statement "There is a real and heightened risk of investment bubble of the type seen in Ponzi schemes which can result in sudden and prolonged crash exposing investors, especially retail consumers losing their hard-earned money. Consumers need to be alert and extremely cautious as to avoid getting trapped in such Ponzi schemes," He added that the virtual currencies are not backed by Government fiat and these are also not legal tender they are not currencies. Virtual currencies saw a phenomenal increase in recent times. Virtual Currencies (VCs) including Bitcoin have become seen huge investment and its prices are soaring new highs. It is a decentralised peer-to-peer payment network where there is no central authority or middlemen. In the circular, the Finance Ministry statement further said that users, holders and traders of VCs have already been cautioned three times by the Reserve Bank of India (RBI) about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to by investing in Bitcoin or other such currencies.