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Virtual currencies like Bitcoin prone to misuse, cautions RBI

RBI has not given any licence, authorisation to any entity to operate with virtual currency

Press Trust of India  |  New Delhi 

Reserve Bank of India
Reserve Bank of India

Flagging possible "black money" risks from like Bitcoin, the RBI has told a that they are "susceptible to misuse" by terrorists and fraudsters for laundering money.

The Reserve Bank further said it has not given any licence and authorisation to any entity or company to operate such schemes or deal with or any (VC).

As such, any user, holder, investor, trader, etc dealing with VCs will be doing at their own risk, the RBI informed the parliamentary standing committee on

An inter-disciplinary committee, which includes an RBI representative, has been constituted by the ministry to examine the regulatory framework with regard to virtual currencies, the central bank said.

"It is true that while may have legitimate uses, some of their characteristics like anonymity make them susceptible to misuse or abuse," the RBI said.

The central bank further said the opaqueness may be taken advantage by criminals, terrorists or fraudsters or for laundering money or even for transactions on the darknet.

Highlighting that there is no underlying or backing of any asset for virtual currencies, the RBI said huge volatility in their values has been noticed in the recent past.

The RBI retreated that it had cautioned users, holders and traders of about the potential financial, operational, legal, customer protection and security related risks they are exposing themselves to.

First Published: Tue, September 05 2017. 01:30 IST