Amid lure of Bitcoins; government issued this caution for people at large

government clarified that the cryptocurrencies are not legal tender

Amid lure of Bitcoins; government issued this caution for people at large

Amid all the speculations over the Bitcoins and other cryptocurrencies, the government on Friday came out to caution people against risk of virtual currencies.

The government clarified that the cryptocurrencies are not legal tender and certainly don’t have any regulatory permission or protection in India.

In one of the sternest warnings by the authorities, the government said virtual currencies are not backed by government fiat. The caution comes against the backdrop of a surge in interest in such instruments, fuelled by astronomical returns in recent days.

The statement said there has been a phenomenal increase in recent times in the price of VCs, including Bitcoin, in India and globally. It said VCs don’t have any intrinsic value and are not backed by any kind of assets. The price of Bitcoin and other VCs, therefore, is entirely a matter of mere speculation, resulting in spurt and volatility.

The government also explained how these currencies are traded and that because these are stored in digital, electronic format, making them vulnerable to hacking, loss of password, malware attack, which may also result in permanent loss of money.

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