Bitcoin has been banned and called illegal in India many times already by Indian government and Reserve Bank of India (RBI). Today, India’s central bank, RBI again issued a strong warning about bitcoin and associated risks of investing in cryptocurrencies in general. The bank said that the users, holders and traders of crypto currencies should understand the potential economic, financial, operational, legal risks.
The Central Bank also highlighted myriad risks associated with ICO and token sales which have allowed businesses raise millions of dollars in short time span.
India is not alone in warning its citizens. Many other asian countries have issued similar warnings. China has banned ICOs and bitcoin mining in its country. It is no longer supplying low cost electricity to the bitcoin mining farms. Central banks in China and Bangladesh have banned bitcoin and South Korea has put a stop on ICOs. Despite all this, Bitcoin price has continued increase to parabolic levels.
Here is what the issued warning on RBI’s website says:
Reserve Bank cautions regarding risk of virtual currencies including Bitcoins
Attention of members of public is drawn to the Press Release issued by the Reserve Bank of India (RBI) on December 24, 2013, cautioning users, holders and traders of Virtual Currencies (VCs) including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs.
Vide press release dated February 1, 2017, RBI has also clarified that it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any VC.
In the wake of significant spurt in the valuation of many VCs and rapid growth in Initial Coin Offerings (ICOs), RBI reiterates the concerns conveyed in the earlier press releases.
December 6, 2017
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