In his annual budget speech, Jaitley announced, “The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these cryptoassets in financing illegitimate activities or as part of the payment system.”

Last December, the Finance Ministry linked cryptocurrency investments to Ponzi schemes, warning crypto investors.

After a nationwide survey revealed transactions over $3.5 billion during a 17-month period, India’s income tax authorities sent notices to thousands of people dealing in cryptocurrency. The Indian Tax Department set out to identify cryptocurrency traders, raiding Bitcoin exchanges within the country. As one of the largest bitcoin markets, India holds a 10% share, but since the crackdown in December, users have been facing challenges with deposits and withdrawals linked to digital currency.

Bitcoin prices have peaked at more than $19,600 in January, but their value has fallen to half that, due to the fears of regulation. It has now dropped below $9,000, the lowest we’ve seen since November 2017.

This past January was the worst month for cryptocurrency, as such values have not been so low since 2015.

Other digital currencies, including Ethereum, ripple, bitcoin cash, and cardano, took an even harder plunge than bitcoin, losing up to 20% of their value.

While India is not allowing cryptocurrencies, the government is still looking to explore the use of block chain technology to accelerate a transition to a digital economy.

Policymakers in countries across the world are planning to discuss regulations of the currency in Argentina at a G20 summit in March 2018.