Rbi cautions against use of bitcoins value
As the government evaluates the banes and boon of technology to come up with an effective legal framework, Nakul Batra, Associate Partner, DSK Legal stresses on the fact India needs to catch up with technology fast. On the heels of a blanket ban on cryptocurrency in China, some leading Indian banks had recently sent out cautionary emails to their customers warning them against dealing with cryptocurrencies. The advisory issued to certain customers dealing in cryptocurrency referred to the impugned circular which directs banks to closely monitor the transactions carried out in the account of such customers on an ongoing basis. This led to confusion among the crypto trading community in India as the said circular was put aside by the Supreme Court in March last year. Taking charge of the situation, RBI directed banks to stop making references to the invalid circular.
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Content:
- Explained: What does the RBI’s latest circular on cryptocurrencies mean?
- Despite RBI caution, 2.5k Indians investing in Bitcoins daily
- RBI clarification on Bitcoin and crypto trading, here are 5 key takeaways
- RBI cautions banks' chiefs on risk involved in cryptocurrency trade
- RBI cautions against unauthorised digital lending platforms; here's what borrowers should do
- Are Bitcoin and other digital currencies the future of money?
- How cryptocurrency has already divided top Indian policymakers
Explained: What does the RBI’s latest circular on cryptocurrencies mean?
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RBI has cautioned users, holders and traders of Virtual Currencies VCs including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs.
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Despite RBI caution, 2.5k Indians investing in Bitcoins daily
Since the mandate of ensuring financial stability rests with the central bank, RBI must be allowed to steer the discussions, and to have the last word. Depending on what form cryptocurrencies take on in India, there could be an adverse impact on monetary policy, possibly on the currency and fiscal stability. So, while an outright ban would probably deprive the country of a promising technological avenue and may also foster an illegal market, we need a top-class regulatory framework to ensure private cryptocurrencies do not end up becoming a fertile ground for nefarious activity like drug trafficking, terror financing or money laundering. From all accounts, it would appear that RBI is best placed to regulate cryptos and to make sure the many use-cases are not misused. Those that argue there are risks associated with other asset classes too must understand that investing in gold or stocks, for instance, is not a new phenomenon. On the other hand, cryptocurrencies are relatively new and their impact on financial markets little understood.
RBI clarification on Bitcoin and crypto trading, here are 5 key takeaways
Times Internet Limited. All rights reserved. For reprint rights. Times Syndication Service. India finally explains its problem with private cryptocurrencies and why it is coming up with its own CBDC Advertisement. BI India Bureau. India Tech CEO Rameesh Kailasam told Business Insider that the Indian government could be looking to draw up a new draft under a new committee as it takes on a softer stance. A bill was expected at the time, which would ban the use of private cryptocurrencies in the country. While this was unnerving for the industry, many stakeholders argued that how the government defines the term would be crucial.
RBI cautions banks' chiefs on risk involved in cryptocurrency trade
The bank cited concerns related to consumer protection, market integrity and money laundering as reasons for its decision. The measure could significantly drive down cryptocurrency trading in the country since it means that Indians will not be able to transfer funds from their bank account to crypto e-wallets for purchase or sale transactions. But the bank has not completely washed its hands of digital coins. The legal status of cryptocurrencies is unclear in India.
RBI cautions against unauthorised digital lending platforms; here's what borrowers should do
These are the core obsessions that drive our newsroom—defining topics of seismic importance to the global economy. Our emails are made to shine in your inbox, with something fresh every morning, afternoon, and weekend. Das also said that he had conveyed his concerns to the Indian government, which is scheduled to table a bill in the parliament banning private digital currencies. This statement of concern by Das can have huge ramifications for the crypto space in India. Just a year ago, Indian cryptocurrency exchanges were reeling under the effect of an RBI circular that asked financial institutions not to support digital currencies.
Are Bitcoin and other digital currencies the future of money?
The Reserve Bank of India has cautioned the users, holders and traders of virtual currencies including Bitcoins , about the potential financial, operational, legal, customer protection and security related risks. It said that it is examining the issues associated with the usage, holding and trading of such virtual currencies under the existing legal and regulatory framework of the country, including foreign exchange and payment systems laws and regulations. RBI noted that the creation, trading or usage of virtual currencies including Bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. It is an open-source protocol, its design is public, and nobody owns or controls it. Bitcoin also boasts of certain unique properties that are not found in other payment systems. Note that as far as Bitcoin is concerned, there is no central authority. It is like email or internet, in the sense that no one owns email protocol or internet protocol. Most of the time, the exchange that has a maximum volume is used as reference point to determine its prices.
How cryptocurrency has already divided top Indian policymakers
THE sheer scale of it is an eye-opener — India now has 15 homegrown cryptocurrency exchange platforms that enable trading and selling, with more than 1. At The United States and Russia rank a distant second and third, respectively. Going by the number of crypto owners in terms of population, India ranks fifth.
Cryptocurrencies are a very serious concern from a macro economic and financial stability point of view, Shaktikanta Das said. Reserve Bank of India RBI Shaktikanta Das sounded alarm on cryptocurrencies, cautioning investors on the potential pitfalls of the digital currency. Cryptocurrencies are a very serious concern from a macro economic and financial stability point of view, Das said on Wednesday. Shaktikanta Das's comments come at a time when crypto craze remains elevated among Indian investors, especially the retail ones.
The bank cautioned users, holders and traders of virtual currencies about the potential financial, operational, legal, customer protection and security-related risks they are exposing themselves to. The bank pointed out that it has been keeping a close eye on developments in the virtual currency world, including bitcoins, litecoins , bbqcoins, dogecoins and other altcoins. The RBI outlined several potential risks related to digital currencies, echoing warnings issued by several central banks and national regulators over the last few weeks. The bank specifically identified the following risks:. Applicable legislation includes foreign exchange and payment systems laws and regulations. There are a few exchanges and trading platforms in India and most of them were launched earlier this year.
Days after some leading banks cautioned people against dealing in cryptocurrencies, the Reserve Bank of India RBI Monday said banks and other regulated entities cannot cite its April order on virtual currencies VCs as it has been set aside by the Supreme Court of India in Banks also warned customers that failure to adhere to the advisory may lead to cancellation or suspension of their cards. So, the RBI intervened and asked banks to stop being notorious.
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