RBI Warns against Usage of Bitcoin and Virtual Currencies
Moneylife Digital Team 06 January 2014

The Reserve Bank of India (RBI) has cautioned users, holders and traders of virtual currencies (VC) like Bitcoin, Litecoin, BBQcoin and Dogecoin and is examining the legal and regulatory framework of VCs. In a press release, RBI stated that Bitcoin and other VCs are exposed to potential financial, operational, legal, customer protection and security related risks.

RBI said, “The creation, trading or usage of VC including Bitcoin, as a medium for payment, are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities.”

Bitcoin was created to solve the mathematical solution to double-counting but it grew into an alternate currency system altogether; its value has skyrocketed as more and more people, investors and enthusiasts jumped onto the bandwagon and started transacting in the virtual currency. Moneylife had published (Issue 17 April 2013), in detail, a primer on Bitcoin.

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