The Reserve Bank of India (RBI), which is the India’s Central Bank, has once again announced to the public that the use of virtual currencies such as
The Reserve Bank of India (RBI), which is the India’s Central Bank, has once again announced to the public that the use of virtual currencies such as Bitcoin has not been authorized. In a press released published on the RBI website, the reserve bank advises the audience that the no company or individual has to be licensed or authorized to operate any virtual currency scheme such as Bitcoin. For that reason, any user, investor, trader or holder dealing with the virtual currency is doing so at its own risk.
In the press release, the India’s financial regulator pointed out the previous public statement that was made to the public on Dec 2013. In the 2013 statement, they had cautioned users and investors of virtual currencies about potential operation, legal and protection risks. Some of the risks that have been out include hacking, malware-led attacks, and huge volatility. IRB however, mentioned that it is currently is analyzing the currency under existing legal and regulatory framework.
While speaking to CCN, Sathvik Vishwanath, who is the CEO of UnoCoin pointed out that the latest statement is just a reiteration of the previous 2013 statement. UnoCoin is the leading bitcoin exchange in India. Sathvik revealed during the interview that nothing has changed since the 2013 statement, in fact, the regulator has not reached to them while formulating bitcoin regulations in the country.
Bitcoin trade in India is still relatively small as compare to most other parts of the world and is not the priority of the RBI. The regulator still has to analyze the cryptocurrency before regulating it. It might also have to study other regulations around the world before formulating it regulations. Regulations like that of New York’s Bitlicense cannot help the industry as it has seen many companies leaving the shore. However, regulation like that of Japan and South Korean is highly welcomed as encourage Fintech innovation.
The latest RBI statement on virtual currency comes when the interest of cryptocurrency is rising very fast in the country. The industry has never been able to grow fully due to the unprecedented controversial statements from the India’s central government. While the regulator has always cautioned the users, RBI’s governor, Raghuram Rajan, has been quoted saying that Bitcoin is fascinating. In a recent RBI’s blockchain whitepaper, the bitcoin is referenced repeatedly. The blockchain technology is seen as a groundbreaking application in the modern cryptocurrency Bitcoin due to disruptive innovation that it promises. However, most researchers have recommended that blockchain technology solution is mature enough to digitize the Indian rupee.