India’s central bank followed China’s lead Tuesday and issued a strong warning about bitcoin and the risks of investing in cryptocurrencies and initial coin offerings.
Despite the advice, bitcoin’s price hit an all-time high of $12,775 Wednesday.
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The Reserve Bank of India repeated warnings it first published about bitcoin in December 2013, and then again in February 2017.
“Users, holders and traders of virtual currencies including bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such virtual currencies,” the bank warned.
It also highlighted the risks involved in taking part in ICOs or token sales, which have become a popular way for businesses to raise millions of dollars in a short space of time. Critics say they leave investors open to fraud.
In India trading in bitcoin remains legal, and its soaring value has led to a buying frenzy on Indian exchanges.
The subcontinent is just one of multiple Asian countries to warn its citizens about cryptocurrencies.
On Sunday, Pan Gongsheng, deputy governor of the People’s Bank of China, said: “One day you’ll see bitcoin’s dead body float away in front of you.”
In September the bank banned ICOs and stopped cryptocurrency exchanges from serving local customers
“If we had not shut down bitcoin exchanges and cracked down on ICOs several months ago, if China still accounted for more than 80 percent of the world’s Bitcoin trading and ICO fundraising, everyone, what would happen today? Thinking of this question makes me scared,” Pan said.
Separately, the central banks of Indonesia and Bangladesh have banned the use of bitcoin as a payment tool, while South Korea has banned ICOs as a way of raising money.
Despite increased scrutiny and regulation across the globe, the price of bitcoin has soared 1200 percent since the start of 2017.
The most recent spike comes on the back of U.S. regulators confirming exchanges would be allowed to conduct bitcoin future trading, providing the cryptocurrency with a greater level of credibility in the financial world.
The Chicago-based Cboe exchange announced Monday it will be the first to launch the service Sunday
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