RBI cracks down on Bitcoin; bans banks from dealing with cryptocurrency traders
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India's second-largest private-sector lender HDFC Bank has blocked all its credit and debits cards to buy or trade bitcoin legal in india rbi. The bank also cited warnings by the the apex bank Reserve Bank of India RBI and the finance ministry on these virtual currencies.
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Here's a recap of the warnings issued by RBI Last week, finance minister Arun Jaitley too had said that the government has not granted any legitimacy to cryptocurrencies like Bitcoin. Therefore, they are prone to losses arising out of hacking, loss of password, compromise of access credentials, malware attack etc. Since they are not created by or traded through any authorised central registry or agency, the loss of the e-wallet could result in the permanent loss of the VCs held in them.
Payments by virtual currencies, such as Bitcoins, take place on a peer-to-peer basis without an authorised central agency which regulates such payments. There is no underlying or backing of any asset for virtual currencies. As such, their value seems to be a matter of speculation. Huge volatility in the value of VCs has been noticed in the recent past. Thus, the users are exposed to potential losses on account of such volatility in value.
It is reported that virtual currencies, such as Bitcoins, are being traded on exchange platforms set up in various jurisdictions whose legal status is also unclear. Hence, the traders of virtual currencies on such platforms are exposed to legal as well as financial bitcoin legal in india rbi. There have been several media reports of the usage of virtual currencies, including Bitcoins, for illicit and illegal activities in several jurisdictions. WannaCry virus hackers collected ransom in Bitcoins from their victims to unlock their computers.
Meanwhile, the apex bank has constituted a group to look at the possibility of having a government-backed cryptocurrency. This, if comes into being, can be an alternative to the rupee for digital transactions.
