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The government of India has said that it would not deem crypto-assets as legal tender adding that it would take “all measures to eliminate” their use as part of a payment system.

“The government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system,” India’s finance minister Arun Jaitley told lawmakers, according to Bloomberg. Jaitley added that the government would “explore use of blockchain technology proactively for ushering in digital economy.”

In December last year Bitcoin reached a peak of almost $20,000 following the introduction of futures contracts on regulated exchanges in the US but in January lost $44.2 billion in market value.

Bitcoin generated $200 billion in market value in 2017, making the January drop the biggest loss of digital assets in one month since Bitcoin was introduced.

Indian income tax agencies have also started investigating transactions that went through illegal Bitcoin exchanges after the country’s central bank warned Bitcoin users about potential risks associated with the cryptocurrency.

In December, sources told Bloomberg that the Indian federal government set up a panel to decide on the country’s stand on cryptocurrencies.

“After today’s announcement, people are getting scared," said CoinSecure support manager Anshul Vashist. "We have seen some dumping of bitcoins," Vashist said.

CoinSecure is a cryptocurrency exchange with a volume of about 100 coins on a daily basis.

Earlier we reported how prominent Bitcoin exchanges Zebpay, CoinSecure, Unocoin, and BtcxIndia are preparing to file applications with the Advance Authority of Ruling (AAR) to obtain clear answers regarding the taxation rules for crypto exchanges.