Reserve Bank of India: Bitcoin Prone to “Misuse”

Investing, News, Opinion, Regulation | September 6, 2017 By:

The Reserve Bank of India (RBI), the country’s central bank, has warned a parliamentary panel on virtual currencies that bitcoin and digital currencies are “susceptible to misuse.”

The central bank said it has not given any licence and authorization to any entity or company to operate such schemes or deal with bitcoin or any virtual currency. As such, any user, holder, investor, trader, or others dealing with virtual currencies will be doing so at their own risk.

Earlier this year, a governmental parliamentary committee of representatives from the Finance Ministry, NITI Aayog, Ministry of Information Technology, State Bank of India, and the Reserve Bank of India was formed to evaluate the existing international framework on digital currencies and suggest anti-money laundering and consumer protection measures best suited for the country.

The RBI told the committee that while it is true that virtual currencies have legitimate uses, some of their characteristics, like anonymity, make them susceptible to misuse or abuse.

RBI also said that the opaqueness may be taken advantage by criminals, terrorists or fraudsters, or for laundering money or even for transactions on the dark web.