RBI released a statement on 5th December, 2017 warning the public about the ‘risk of virtual currencies including Bitcoins’. This statement is the third it has made after a warning in February this year and earlier in 2013.
RBI continues to reiterate its stand that cryptocurrencies are not regulated by RBI and that RBI has significant concerns around the use of cryptocurrencies, ICO’s, and token sales. It states:
“In the wake of significant spurt in the valuation of many VCs and rapid growth in Initial Coin Offerings (ICOs), RBI reiterates the concerns conveyed in the earlier press releases.”
With Bitcoin hitting record high prices of over $17,000, public interest and speculation has hit a new peak in India. The RBI warning has not deterred investors in India or abroad for further buying Bitcoin or other cryptocurrencies like Ethereum and Ripple.
The other major takeaway from the RBI release is that it has specifically decided to call out the ICO’s, new cryptocurrencies, and the lack of economic, financial, operational, and legal frameworks around them.
The Reserve Bank of India in its previous statements has stated that those who were trading in virtual cryptocurrencies were doing so at their own risk and that the RBI has neither given an authorization or license for companies to operate in this space.