Dealing with virtual currencies such as Bitcoin, the Reserve Bank of India on Thursday made a notice to ring fence banks from using them for any purpose, looking into the first policy statement of fiscal year 2018-19, the Central Bank made it clear that the banks should stop dealing with entities that deal in digital currencies, such as bitcoins. This has been the warning of the central bank in the past, always passing a caution to users against using virtual currencies including Bitcoins.
“To ring fence the RBI regulated entities banks from the risk of dealing with entities associated with virtual currencies, they (banks) are required to stop having business relations with the entities dealing in virtual currencies forthwith. And it is expected of them to unwind the existing relation in three months,” said B P Kanungo, deputy governor of RBI.
According to the deputy governor he said the digital tokens are getting more waves in the international scene and the regulatory aspect of the currency is not stable. Investing in digital currency for a risky purpose can adversely impact market integrity, and capital controls, also if they grow in their critical size, they can be a threat to financial stability.
“Users, holders and traders of Virtual Currencies (VCs) including Bitcoins are cautioned regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs,” said the RBI release in December 2017.
Likewise the press release on February 1, 2017, RBI had made it clear that it has not given any licence/authorization to any person or company to operate such schemes or deal with Bitcoin or any Virtual currency.
The RBI, however, acknowledges the importance of blockchain technology that lays the foundation of virtual currencies.
“The blockchain should be encouraged to be exploited for the benefit of economy,” said Kanugo.
In response to global digital tokens, global regulators are thinking about fiat tokens. “They are the liability of central bank. They hold the promise of reducing the cost if printing,” said Kanugo.
In view of this, the central bank has set up an inter-departmental committee to explore feasibility and desirability of starting our own digital currency in future, informed Kanugo.
Like china, India is Exploring it own Digital Money.
In fact, the statement and regulatory stance is almost same with that of china. The Indian statement refers to protecting its citizen from being victims of fraudulent practices that is related to digital assets, curbing money laundering and potential terrorist funding just as its counterpart from the Bank of China.
Furthermore, the RBI also made it clear in their sentence that they will be an official digital currency the will base on blockchain technology that could be implemented in the nearest future, from the features of the currency it is more like Bitcoin but still it will be regulated by the Central Bank, so with that it will be offering the same limitations as the current Fiat.
This has caused some misunderstanding and anger throughout the Indian cryptocurrency environment, The users in Indian are very down getting to hear the news that cryptocurrency is being banned because they want to launch their own. A statement made by Sathvik Vishwanath, co-founder of Unocoin, a virtual currency exchange “I don’t believe this is the right direction that the central bank has taken. This will cause panic among a few million people in India who are already using cryptocurrencies. If they want to launch their own digital currencies, they don’t need to ban existing ones.”
From what he said above I believe with him the idea of giving up on an already existing currency is bad, they are already millions of people making use of the currency and it will be a great loss to them both the investors who are still expecting more from their investment, this is a bad idea for the people of india who make use of cryptocurrency.
BITCOIN EXPERT SEEKS TO EDUCATE INDIA ABOUT CRYPTOCURRENCY
The unthinking reaction to the minister’s statement and the consequent fall in Bitcoin prices could be channeled to lack of awareness about Bitcoin itself. “As it stands on the way Indians understand the term Bitcoin is uncertain, so many people in India who have interest in the technology don’t really understand it well enough.
This time they are so many issues with cryptocurrency it is going through a very bad situation but, with time things will not be the same, the market is coming to grow big keep an eye on the platforms you invest in thanks
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