Reserve Bank of India (RBI) warned the people against of using Virtual Currencies such as Bitcoins. Upon announcing the news, it said that by using such instruments for financial transactions poses security-related issues involved.
“The Reserve Bank of India suggests that it has not given any licence or authorization to any company to manage such schemes or deal with Bitcoin or any virtual currency,” said by the Reserve Bank of India on Wednesday. ”
“As such, any user, holder, investor or trader dealing with virtual currencies will be doing so at their risk,” the central bank warned. The usage of Virtual Currencies as a medium for payment are not authorised by the Central Bank or any other monetary authority.
According to the reports of RBI, no regulatory approvals, authorization or registration stated to have been obtained by the entities. Moreover, RBI also said that Non-banking Financial Company-Micro Financial Institutions (NBFC-MFIs) should ensure the common interest on loans.
The sanctioned loans during a quarter don’t exceed the average browsing cost during preceding quarter. However, Central Bank also announced that the relaxed commercial paper lowering the minimum credit rating from A2 to A3 and ticket size from Rs 10 lakh to Rs. 6 lakh.
RBI has detailed the risks in such currencies since the Virtual Currencies stored in the digital media known as electronic wallets. This may lead to many losses such as arising out of hacking, malware attack, loss of password and comprise of access credentials.
Moreover, some of the payments through Virtual Currencies take place on a peer-to-peer basis without authorised by central agents for such payments. RBI also said that the Virtual Currencies such as Bitcoins traded on exchange platforms which are set up in various jurisdictions.