RBI examining legal, security aspects of virtual currencies: Chidambaram

February 11, 2014 05:11 pm | Updated November 17, 2021 01:56 am IST - New Delhi

The government, on Tuesday, said the Reserve Bank of India (RBI) was examining the legal and security aspects of virtual currencies such as bitcoins and litecoins.

“The RBI is presently examining the issues associated with the usage, holding and trading of virtual currencies, including bitcoins, under the extant legal and regulatory framework of the country, including foreign exchange and payment systems laws and regulations,” Finance Minister P. Chidambaram said in a written reply in the Rajya Sabha.

The RBI in last December had cautioned users, holders and traders of virtual currencies about potential financial, operational, legal, customer protection and security-related risks that they were exposing themselves to.

Mr. Chidambaram said the public at large had been informed that creation, trading or usage of virtual currencies as a medium of payment were not authorised by any central bank or monetary authority.

“No regulatory approvals, registration or authorisation has been obtained by entities concerned for carrying on such activities. As such, they may pose several risks to their users,” the Finance Minister said.

At least 93 virtual currencies are at present being used by people across the world over the internet, as also for some offline transactions, and their total valuation has reached $13 billion (over Rs.80,000 crore), out of which bitcoin alone accounts for over $9 billion, according to market estimates.

After the RBI and other central banks across the world warned financial intermediaries about dealing with virtual currencies through traditional channels, the buzz around such denationalised currencies, which were not backed by any assets, had tempered for some time.

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