Crypto-currency Bitcoin is in news for the past one week as it hit $11,000. However, the Reserve Bank of India (RBI) warned public that it has not given any licence to anyone to operate such virtual currencies.
In a notification, the central bank said, "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."
This is the third time that the central bank has come with a warning notice against the usage of virtual currencies.
The RBI further stated that "no regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities."
Earlier in February, the apex bank had said that people using virtual currencies would be "doing so at their own risk. It also means that the RBI won't provide any customer protection in case such currencies blow up or get compromised.
"In the wake of the significant spurt in the valuation of many VCs and rapid growth in Initial Coin Offerings (ICOs), RBI reiterates the concerns conveyed earlier," the bank said.
Earlier in March, then Deputy Governor of RBI, R Gandhi had said, "Blockchain, the foundation for Bitcoins like innovations, is touted to be the death knell of currency. I believe its potential is being overstated. We can see that in these types of solutions for Virtual Currency, there is no central bank or monetary authority. They pose potential financial, operational, legal, customer protection and security related risks."
On Tuesday, for the first time, Bitcoin surpassed $12,000 mark amid speculation that the widespread use of futures will help lead to digital currencies, Bloomberg reported.
As Bitcoin is riding on a bull and hitting fresh highs, more and more investors are getting attracted toward this virtual currency. In the last three months, 400,000 investors have joined Bitcoin trading, which is 50 percent of its total user base.
