The Reserve Bank of India has warned the public against use of virtual currencies such as Bitcoins, pointing out that it has not authorised trading or usage of virtual currencies. In a latest statement, the central bank said that “it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader etc. dealing with virtual currencies will be doing so at their own risk.”
It has also drawn attention to a December 2013 notification cautioning the investors against the same and has stated that those investing in such virtual currencies are exposing themselves to potential financial, operational, legal, customer protection and security related risks.
In order to create awareness among investors, RBI in December 2013 had issued a notification stating that the virtual currencies stored in e- wallets are prone to losses arising out of hacking and there is no established regulatory framework for recourse to customer problems or disputes. Further, central bank had also flagged issues surrounding valuation and said that those who trade on unregulated platforms face legal and financial risks.