The Reserve Bank of India (RBI) issued a new notice this week, warning digital currency users and traders about the risks faced by anyone engaged in cryptocurrency transactions. The central bank reminded Indians that it has not yet authorized any of those digital currency activities, nor provided licenses to any cryptocurrency companies.
A February 1, 2017 message on the RBI website states that,
“The Reserve Bank of India had cautioned the users, holders and traders of Virtual Currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to, vide its press release dated December 24, 2013. 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.”
Bitcoin interest in India increased dramatically in recent months, due to the government’s demonetization efforts. The new announcement may just be a precautionary measure in response to that increased interest, since it echoes previous statements made by the RBI in the last several years. However, it does serve as a reminder that the country’s central bank is still paying attention to digital currency activity in India, even as the nation continues its war on physical currency with new penalties on cash transactions of more than 300,000 rupees – roughly $4,500 USD – scheduled to begin in April.