Reserve Bank of India cautions people about trading in Bitcoins


Bitcoin hits record high of 11850, RBI reiterates warnings about trading

Mumbai: The Reserve Bank of India (RBI) on Tuesday reiterated its concerns about Bitcoins, amid the cryptocurrency hit a record high of 11,850 on Tuesday, stoking fears that a rapidly swelling bubble could burst in a spectacular fashion.

The Reserve Bank has been repeatedly saying since late 2013 that they possess "potential financial, operational, legal, customer protection and security related risks".

The RBI also clarified that it has not given any licence or authorisation to any entity or company to operate schemes or deal with Bitcoin or any other VC.

Citing its earlier warnings on the subject, the central bank said, "in the wake of [a] significant spurt in the valuation of many virtual currencies (VCs) and rapid growth in Initial Coin Offerings (ICOs), RBI reiterates the concerns", reports PTI.

Bitcoin powered to a record high of $11,850 today, continuing its surge from below $1,000 at the start of the year. "There is no underlying or backing of any asset for VCs". India's central bank issued its first warning against bitcoin in December 2013, telling adopters that the "creation, trading and usage" of bitcoin as a medium of payment wasn't authorized by any central bank or monetary authority, at the time. Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack etc.

The 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.

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