This is an interesting development in the still extremely youthful existence of cryptocurrencies, yet one that many may feel is erring to far on the side of caution.
If other countries follow suit, then Bitcoin and his fellow crypto cousins might have a problem on their hands - although there is certainly enough of a momentum elsewhere for the movement to see India reverse its decision.
One of the biggest reactions so far, as India says it will move to stamp out use of cryptocurrencies, which it considers illegal.
The country's finance Minister Arun Jaitley made the announcement this week, launching a no-holds-barred attack on virtual currencies such as Bitcoin.
Governments around the world are grappling with how to regulate cryptocurrency trading, and policymakers are expected to discuss the matter at a G20 summit in Argentina in March.
"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," Jaitley told parliament in his annual budget speech.