RBI Warns Against Usage of Bitcoins and other virtual currencies


#1

The Reserve Bank of India (RBI) has issued a notice stating that they haven’t approved usage of Bitcoins in India to any company to trade in these and that the users are doing it at their own risk.

The Reserve Bank of India advises that it has not given any licence / authorisation to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk.

The future of bitcoins and other virtual currencies in India is now at a major risk.

Are you still interested in investing in bitcoin? What’s your take?


#2

This is a tough one…The central bank has a monopoly over the monetary matters of the country. So, many feel that should not be the case as it controls and ebbs the free flow of money. I can understand the ideology but like all great ideas this too will have misuse…I am all for virtual money but money that evades the legal and regulatory framework, i have issues with. So, should i be able to move money freely without Bank’s benefiting, maybe yes. But remember it is how business has been done for centuries…Maybe we want to disrupt the system and stop the banks from making money, but eventually even the virtual currencies will become like today’s currency. Having worked in Banking, I have seen way too many attempts at tax evasion. Like Ron said in one of his posts, it is all about how much money I can make…so that is the key here.


#3

Central bank is afraid of when people will control the currency instead of them.


#4

Hey Ron,

Have been trying too keep myself abreast with the all the developments in the Bitcoin space…

Here are some observations, Bitcoin is being traded for the “real world” currencies and now has a benchmark rate. So what is the point of having it all? People are flocking it like it is the new haven…This is exactly what happened to the USD when gold standards were abolished and the USD became the defacto reserve currency…I read a very interesting article by Dr Raghuram Rajan over the weekend. One of the most amazing things he said was how the 2008 crisis has made people re-think of the current world order and how the common man wants his pound of flesh, hence the movement towards the right wing parties (USA, France, India etc) so in a way, I feel Bitcoin is trying to do that…trying to get a pound of flesh where the monetary authorities are refusing to budge…The concern remains, a currency is validated by the Fiat that endorses it…who is validating Bitcoin, how is the mining adding to the M1, M2 and M3 money supply of any economy…even the virtual ones…I cant buy a pack of biscuits with Bitcoins, can I now? So, my take is, one of the two things is going to happen, Bitcoin will get legalised and will have a traded exchange rate all other currencies, which I feel is counter productive to the ideology, because they wanted it to be a parallel payment mechanism, not just another type of of a currency. The other being the RBI’s reaction, where it may get banned…either ways, I dont see how any problem is solved…We are just adding another currency to the pool…


#5

Found this link today on blockchain , that powers crypto currencies.

https://medium.freecodecamp.org/how-does-blockchain-really-work-i-built-an-app-to-show-you-6b70cd4caf7d