MUMBAI: Cryptocurrencies, including Bitcoins, have been outlawed in India following similar actions by countries such as China and South Korea, dealing a blow to enthusiasts.“The government does not consider cryptocurrencies as 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,” Jaitley said. A number of exchanges who were trading on crypto-currencies now face imminent closure.“Government will now either come out with a legislative mechanism or make a suitable amendment in existing legislation to ensure that dealing and trading in cryptocurrency is made illegal and will penalise entities and individuals who are involved in trading and circulation of cryptocurrency,” said Monish Panda, founder of law firm Monish Panda & Associates.While some banks have already clamped down on transactions by those associated with cryptocurrencies, others which have not already suspended their dealings would be forced to do so now.In the past, the Indian government and the RBI have issued warnings against dealing in cryptocurrencies including Bitcoins. The RBI recently warned users of virtual currencies, including Bitcoins, alerting them to the potential economic and financial risks associated with them.“Therecouldbe panic-selling, which could lead to losses,” said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP, a chartered accountant firm. Traderswon’t be able to set off their losses against profits from other assets since it has been declared an illegitimate trade, he said. But companies dealing in cryptocurrencies, especially Bitcoins, claim that it is not illegal.“The finance minister, in his Budget speech, has reiterated the stance by the RBI that cryptocurrency is not recognised as legal tender in India; it is being misreported that Bitcoin is illegal. This is not true. We continue to work hard to grow this industry responsibly,” said Nischint Sanghavi, head of exchange, Zebpay.Jaitley also said the government would explore the use of blockchain technology to add muscle to the digital economy.