We have seen multiple warnings from government regarding Bitcoin and cryptocurrency. In virtually every case, such a warning revolves around the risks associated with this new form of money. The RBI issued a statement over a week ago, which went by virtually unnoticed. In this notice, they mention how virtual currencies are prone to misuse. An interesting statement, to say the least.
The Reserve Bank of India has a bit of a difficult relation with cryptocurrency. It is evident they see cryptocurrency as a big threat to their own business model. Given the failed demonetization effort in the country, that is anything but surprising. Their latest warning revolves around how cryptocurrencies can be used for money laundering and terrorist financing. We have heard similar claims before, although they have never been proven as far as terrorist financing is concerned. Money laundering is a different matter, as that is usually a case of people making wrong decisions.
RBI Warns About Bitcoin Amid Own Failures
Moreover, the RBI has no intention to provide licenses to any cryptocurrency company right now. That is no surprise either, as there is no official regulation in the country. That situation may come to change rather soon, though. We know the Indian government is in talks with cryptocurrency industry leaders to come up with a viable solution. It is unclear when these new rules may be introduced, though. A swift course of action is more than warranted right now.
While this warning carries no real weight whatsoever, the risks shouldn’t be ignored. It is evident cryptocurrency poses risks, but so do other traditional investments. This includes investments provided by the RBI and all of its partners. However, with such traditional investments, users have some degree of financial protection if things were to go awry That is not the case with cryptocurrencies, unfortunately. However, these harsh words from the bank are merely based on speculation for the most part.
It is evident the RBI has no love lost for Bitcoin. That situation has never been any different nor will it change in the near future. Now is not the time to purposefully stifle financial innovation, though. All attempts by the RBI to demonetize the country have failed so far. Moreover, their failure to address crime and money laundering through fiat currency hasn’t done them any favors either. It will be interesting to see how the cryptocurrency situation in India evolves over the coming months.
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