Authorities Warn Indian Citizens Against Investing in Cryptocurrencies

India’s Himalayan state of Jammu and Kashmir’s police department has recently released a public statement, in which it warns the public against investing in cryptocurrencies, according to a report by local business news daily, The Business Standard.

The statement detailed about the increased risks that are associated with investing in volatile currencies like Bitcoin (BTC) and that neither the state nor the central government has sanctioned cryptocurrencies yet. The Inspector-General of Police of Jammu and Kashmir said,

“The general public is informed not to make any type of investment in cryptocurrencies, virtual currencies such as Bitcoin because there is a real and heightened risk associated with them.”

He further stated that the crypto market is prone to volatile price shifts and “sudden and prolonged crashes”, which could potentially expose investors including retail consumers who stand to lose their hard earned money.

As of now, all banks operating in India have been banned from the trading of cryptocurrency, following a circular issued by the Reserve Bank of India (RBI). This strongly negative stance against digital currencies has led to many businesses resettling to other locations and a challenge in the Supreme Court.

Cash ATMs across the country are also showing messages strongly warning consumers against investing in cryptocurrencies, reminding them that they have not been approved yet, and are a risky venture to step into.

Earlier this week, Pon Radhakrishnan, the Minister of State in the Ministry of Finance and Ministry of Shipping, said that the government is approaching cryptocurrency regulation with caution. Radhakrishnan said that the lack of a “globally acceptable solution” meant lawmakers were unlikely to issue formal statues in the short term.

The RBI has also recently confirmed that it is not issuing a national cryptocurrency called the “crypto-rupee”, as of now. In early 2018, the central bank in charge of one of the largest economies on the planet had announced that it was considering launching a Central Bank Digital Currency (CBDC) and plans seemed to be going forward at a steady pace with the formation of an interdepartmental group to investigate the advantaged of issuing a CBDC.

The group in question has been secretive of their workings and much of the work done is unknown to the general public. However, a local newspaper, Hindu Business Line quoted an unidentified internal source saying,

“The government doesn’t want the digital currency any more. It thinks it is too early to even think about a digital currency.”