India’s central bank has become the latest monetary authority to sound a warning to investors on cryptocurrencies, marking the second such proclamation from the bank this year.
The Reserve Bank of India, which underwrites the rupee and the Indian financial system, said this week that anyone who uses, holds or engages in cryptocurrency transactions should be wary of the risks involved, specifically highlighting bitcoin as the main concern.
The comments tie in with statements made earlier in the year, with the Reserve Bank of India saying back in February that users should be cautious, after similar statements made originally back in 2013.
In keeping with the messaging in previous announcements of this kind, the Reserve Bank was keen to stress that the domestic market at present has no licensed or authorized entities.
“RBI has clarified that it has not given any license/authorization to any entity/company to operate such schemes or deal with bitcoin or any digital currency.”
The latest announcement also specifically targets initial coin offerings, or ICOs, which have experienced rapid growth to raise over $2 billion in 2017 so far. The comments also noted the rate at which bitcoin has exploded in value in recent months, flagging concerns for investors in the event of a market collapse.
“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.”
The announcements come at a time of changing regulatory winds in India, following the decision of the Supreme Court in November to request a government response to a petition for clarity on the current rules.
In particular, the petition demanded certainty to end a so-called regulatory “vacuum” in the Indian cryptocurrency space.
“The lack of any concrete mechanism pending the regulatory framework in said regard has left a lot of vacuum and which has resulted in total unaccountability and unregulated Bitcoin (crypto money) trading and transactions.”
In response to the Supreme Court ruling, regulatory proposals are being drafted between government departments, but have yet to materialize into any concrete draft bills.
Nevertheless, today’s repeated warning from the Reserve Bank of India could perhaps give some insight into how regulators and financial authorities might be viewing cryptocurrencies there.
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Odds Shark Staff Fri, Apr 29, 3:00pmBitcoin