NEW DELHI: India warned on Friday against investing in cryptocurrencies including bitcoin, likening them to “Ponzi schemes”, as it became the latest country to urge caution.

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 per cent from its record high of $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.

Published in Dawn, December 30th, 2017

Opinion

Editorial

‘Draconian’ law
06 Oct, 2022

‘Draconian’ law

THE debate over what it means to be ‘sadiq’ and ‘ameen’ has reignited after the incumbent Supreme Court ...
Welcome clarity
Updated 06 Oct, 2022

Welcome clarity

There needs to be consensus amongst all political actors that matters of governance should be the exclusive domain of civilians.
Car purchases
06 Oct, 2022

Car purchases

IF we are in the market to buy a new car, we end up paying a significantly large amount as premium over the sticker...
More than economics
Updated 05 Oct, 2022

More than economics

Ishaq Dar’s appointment is but a sign of the paradigm shift in economic policymaking.
Dens of corruption
05 Oct, 2022

Dens of corruption

MOST prisons in Pakistan are a microcosm of the inequitable and exploitative world outside their walls. A probe by...
Football tragedy
05 Oct, 2022

Football tragedy

SPORTS arouses the rawest of human emotions. Football is no exception — in fact, the passions on display at...