For the second time this year, the Reserve Bank of India has issued a public warning on digital currencies and bitcoin. With a public notice on December 5, India’s central bank has recommended customers of digital currencies like bitcoin about potential financial risks and client protection and safety associated dangers in coping with digital currencies.
The Reserve Bank of India reiterated its position of not authorizing or licensing any organization to function such schemes or cope with Bitcoin or any digital currency, in a repeat of its caution from February these 12 months. The Reserve Bank of India issued its first warning towards bitcoin in December 2013, telling adopters that the development, exchange and utilization of bitcoin as a medium of exchange wasn’t legal by any central bank or financial authority.
Not like preceding signals, the modern public notice consists of a warning about initial coin offerings, a famous new type of fundraising in which organizations raise capital in digital currencies like bitcoin and Ethereum’s ether in exchange for their digital tokens.
The Reserve Bank of India stated:
“Within the wake of huge spurt within the valuation of many digital currencies and fast grown in Initial Coin Offerings, Reserve Bank of India reiterates the worries conveyed in the earlier press releases.”
The Indian central bank’s warning comes at a time while Indian retail traders are unexpectedly adopting bitcoin, in spite of soaring charges. Even as government doesn’t officially recognize bitcoin, it isn’t ruled illegal either. The paradox has seen India’s Supreme Court call at the central authorities to issue clear recommendations to regulate the flow of Bitcoin in India.
In April, Indian government launched the Virtual Currency Committee, an interdisciplinary operating group of representatives from multiple Indian governmental ministries and banks to analyze and propose a regulatory framework for digital currencies in India. The committee is thought to have submitted its record to Indian finance minister Arun Jaitley in August. The contents and next verdict at the regulatory and legal outcome of digital currencies is still kept under wraps.