Government of India, on 28
th March 2017, indicated that the use of virtual currencies such as Bitcoin is not authorised by RBI and could lead to anti-money laundering provisions.
RBI has cautioned users, traders and holders of the virtual currency including Bitcoin, regarding the financial, legal and security risks linked with the usage.
The absence of counter parties in usage of virtual currencies including Bitcoins, for illicit and illegal activities in anonymous/pseudonymous systems could subject the users to unintentional breaches of anti-money laundering.
This could be combating the financing of terrorism laws.
The creation of virtual currencies like Bitcoins as a medium of payments is not authorised by any central bank or monetary authority.
No regulatory approval, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities.
The RBI had earlier warned that any user, holder, investor and trader dealing with virtual currencies would be doing so at his/her own risk.
Virtual Currencies: Know More- Bitcoin can be called the new trend setter, as its success has spurred the launch of many other virtual currencies (there are more than 150 cryptocurrencies).
- The currencies inspired by Bitcoin are collectively called altcoins.
- They have tried to present themselves as improvised and modified versions of Bitcoin.
- These currencies are easier to mine.
- They involve greater risk in terms of lesser liquidity, acceptance and value retention.
