JOIN USThe Reserve Bank of India (RBI) on Tuesday warned the public against the use of virtual currencies such as Bitcoin saying that users expose themselves to potential financial, operational, legal and security related risks.
In a public advisory statement, the apex bank said it had been “examining the issues associated with the usage of virtual currencies” under the legal and regulatory framework of the country.
“The creation, trading or usage of virtual currencies including Bitcoins are not authorised by any central bank or monetary authority. As such, there is no established framework for recourse to customer problems,” the RBI said in a statement.
It may be noted that Bitcoins and some other virtual currencies of late have been gaining currency in India rapidly.
In fact, an online platform "SourceForge" that connects consumers to open-source projects such as Bitcoin and facilitates downloads, pointed out that there have been 35,648 downloads in India since the launch of Bitcoins on November 9.
A number of India-based trading platforms and exchanges have sprung up over the last six months, catering to Indian users by allowing them to purchase Bitcoin in rupees.
However, the RBI, makes it clear that no regulatory approval has been obtained by for carrying out such activities. “There have been several media reports on the usage of Bitcoins for illicit and illegal activities. The absence of information of counterparties could subject users to unintentional breaches of anti-money laundering,” the central bank stated.