ven as Bitcoin taps recent high fuelling investor’s interest, on 5th Dec 2017 the Reserve Bank warned the public of the hazards of Investing In Bitcoins or any other digital currencies.
Last week It can be noted that the value of a single Bitcoin, which is not synchronized by any financial authority, had gone up to $11,000 in a rally which confused market analysts.
On December 24, 2013 the central bank had stated in a note that, “There is no original or support of any asset for Digital Currencies. As such, their price seems to be a matter of hypothesis. Huge volatility in the price of VCs has been observed in the recent year. As a result, the clients who are Investing In Bitcoins are exposed to possible losses on account of such volatility in value.”
According to professionals.
Bitcoins or other Virtual Currencies do not have a wide recognition as tender for resolving trade transactions. They are ‘minted’ using algorithms which are based on blockchain technology.
Since 2013 The Reserve Bank is constantly saying that Investing In Bitcoins holds “financial, functional, legal, customer protection and security related risks”.
The apex bank had stated that it was studying the sector but strongly explained that it is uncomfortable with “non-fiat” crypto-currencies.
In September Executive director Sudarshan Sen said in an industry summit that, “As regards non-fiat crypto-currencies, I think we are not comfortable.”
In September 2013 in his first comment towards crypto currency, he said that “The formation, trading or usage of VCs including Bitcoins, as a medium for payment are not legalized by any central bank or financial authority. No regulatory approval, registration or authorisation is stated to have been acquired by the units anxious for carrying out such actions.”
Currencies stored in digital wallets are prone to losses and the reasons behind this are online hacking, forgetting the password, compromise of access credentials and malware attack.
The RBI had also said that the trading platforms on which the Bitcoins are exchanged are set up in various authorities whose legal status is also ambiguous.