RBI Reiterates caution against use of Virtual Currencies, Prohibits Bitcoins

BitcoinReserve Bank of India (RBI) on Tuesday, December 5, 2017 reiterated caution to the “users, holders and traders” of Bitcoins about the security related risks associated in dealing with the virtual currencies (VCs).

RBI has reiterated its stand mentioning that the apex bank has not given any license or authorization to any entity or company to operate any schemes or deals through the medium of VC like Bitcoin.

The central bank had also mentioned in December 24, 2013 that “There is no underlying or backing of any asset for VCs. As such, their value seems to be a matter of speculation. Huge volatility in the value of VCs has been noticed in the recent past. Thus, the users are exposed to potential losses on account of such volatility in value”.

RBI had also said that the exchange platforms on which the Bitcoins are traded are set up in various jurisdictions whose legal status is also unclear.

Bitcoins or other VCs do not yet have a wide acceptance as tender for settling trade transactions. They are ‘minted’ using algorithms which are based on block chain technologies.

The value of Bitcoin spurted significantly in past couple of months taking it above $12,000 at all-time high levels.

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