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RBI Will Not Regulate Bitcoin In India, But Warns Of Risks; Our Take

RBI issued a warning that it will not regulate any Virtual Currency including Bitcoin in India and warned people who were dealing with the currency in India of the risks involved, saying that they're exposing them to financial, legal, operational and security related risk. On December 24, RBI stated in the advisory that it had been “examining the issues associated with the usage of virtual currencies” under the legal and regulatory framework of the country. It said that the creation, trading or usage of virtual currencies including Bitcoin are not authorised by any central bank or monetary authority and added that there is no established framework for recourse to customer problems. Also read: Income Tax Department Wants To Tax Bitcoin Miners In India The main points raised by RBI were: - Since they are not created by or traded through any authorised central registry or agency, there is no way to get back stolen coins. - There is no established framework for recourse to customer problems / disputes / charge backs etc. - Users are exposed to potential losses on account of volatility in value of these currencies. - Bitcoin exchanges are set up in various jurisdictions whose legal status is also unclear. So all traders are exposed to legal and financial risk. - Usage of Virtual Currencies for illegal activities. - Users subjected to unintentional breaches of laws such as anti-money laundering and combating the financing of terrorism (AML/CFT) laws. Later in December ToI had quoted RBI deputy governor KC Chakrabarty as saying that…

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