On Thursday 5th July 2018, the Reserve Bank of India will beseech the exchange of bitcoin exchange with banks and financial institutions from the lingual currency such as Bitcoin. In the first phase statements of financial year 2018-19, the central bank said that banks should stop dealing with digital currency such as biotechnology institutions. The central bank is against the bitcoin. Bitcoin is the world's largest cryptocurrency.The deputy governor also said that the digital tokens are getting international attention and regulatory responses are not uniform. The investment in digital currency for speculative purposes can adversely impact market integrity, and capital controls, and if they grow in their critical size, they can endanger financial stability.
On three occasions, the central bank has cautioned the users, traders and holders of digital currencies.The first warning was sent in December 2013, the second in February 2017 while the last one in December 2017.Users, holders and traders of Virtual Currencies including Bitcoins are cautioned regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such V Cs," said the RBI release in December 2017.Similarly, through a press release on February 1, 2017, RBI had clarified that it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any VC.
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.
