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India
is the latest country to warn against investing in cryptocurrencies
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India warned Friday
against investing in cryptocurrencies including bitcoin, likening them to
"Ponzi schemes", as it became the latest country to urge caution.
AFP
report continues:
Despite
a boom in trade that has seen prices soar, cryptocurrencies "don't have
intrinsic value and are not backed by any kind of assets," the Indian
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," it said.
Bitcoin
prices plunged by almost 40 percent from its record high of US$19,500 this
month as investors cashed out following the wildly volatile currency's
stratospheric rise.
Analysts
and governments have repeatedly warned about a bubble that could burst at any
moment as investors, many inexperienced, piled into the currency.
India's
government said consumers needed to be "extremely cautious as to avoid
getting trapped in such Ponzi schemes".
Its
warning came a day after South Korea, a hotbed for cryptocurrency trading, said
it would ban anonymous trading of virtual currencies.
On
Tuesday Israel announced a move to ban trading in cryptocurrency-based
companies on the Tel Aviv market until it can regulate transactions involving
digital coins.
The
vice-president of the European Central Bank has also expressed concern about
the relentless rise in the value of bitcoin.
US Federal Reserve boss Janet Yellen has said bitcoin is not money and called on banks to be certain their digital currency transactions adhere to anti-money laundering statutes.
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