India: Reserve Bank Of India Cautions Regarding Risk Of Virtual Currencies Including Bitcoins

The Reserve Bank of India (hereinafter referred to as "RBI") vide its press release 2017-2018/1530¹ dated December 5, 2017, has restated the concern over the usage and flow of Virtual Currency including Bitcoins, by drawing the attention of public to its earlier own press release 2016-17/2054² dated February 1, 2017 and press release 2013-14/1261³ dated December 24, 2013.

Whereas, the Supreme Court of India recently issued a notice⁴ to the Ministries of Finance, Law and Justice, Information Technology, and market regulators including Securities and Exchange Board of India and the Reserve Bank of India after hearing a Public Interest Litigation (Writ Petition⁵ (Civil) no.1076 of 2017) under Article 32 of the Constitution against the Union of India filed by Adv. Dwaipayan Bhowmick seeking a regulatory framework to be laid down on Virtual Currency and wanted that the virtual currency be made accountable to the exchequer.

RBI vide its press release 2016-17/2054 dated February 1, 2017 clarified that it has not given any license/ authorization to any entity/ company to operate such Virtual Currency. Further, it clearly stated that any user, holder, trader, investor etc., will be doing business solely at their own risk.

RBI vide its press release 2013-14/1261 dated December 24, 2013, cautioned all the users, holders and traders of the Virtual Currency, including Bitcoins, about the operational, potential, legal, consumer protection and security related risks involved in such Virtual Currency.

RBI referring to the above mentioned press releases has once again reiterated the concern conveyed by it.

Footnotes

1. https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR15304814BE14A3414FD490B47B0B1BF79DDC.PDF

2. https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR205413F23C955D8C45C4A1F56349D1B8C457.PDF

3. https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/IEPR1261VC1213.PDF

4. http://supremecourtofindia.nic.in/supremecourt/2017/35252/35252_2017_Order_13-Nov-2017.pdf

5. https://barandbench.com/wp-content/uploads/2017/11/PIL_bitcoin-watermark.pdf  

For further information please contact at S.S Rana & Co. email: info@ssrana.in or call at (+91- 11 30562000). Our website can be accessed at www.ssrana.in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.