Moneycontrol
Nov 06, 2017 07:22 PM IST | Source: Moneycontrol.com

Bitcoins not to be used for payments and settlements for now: RBI

The Reserve Bank of India (RBI) today reiterated its stand on cryptocurencies saying the bitcoins will not be used for making payments and settlements for now.

Beena Parmar @BeenaParmar

The Reserve Bank of India (RBI) today reiterated its stand on cryptocurencies saying the bitcoins will not be used for making payments and settlements for now.

Answering a query from the audience at the FIBAC banking event, S Ganesh Kumar, Executive Director of RBI said, "Our current position on bitcoins is that we will not be using it for any payments and settlements...though the technology underlying cryptocurrencies will not end."

This comes as the bitcoin price demonstrated a minor correction subsequent to achieving a new all-time high on November 5, declining from over USD 7,500 to 7,270 in 24 hours.

In September, the banking regulator had said that it is looking at fiat cryptocurrencies but not comfortable with bitcoins or virtual currency (VC).

Sudarshan Sen, RBI Executive Director, had said, "Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak. We are looking at that closely."

A fiat currency is the legal status given to a currency issued by the central bank.

As per RBI's views, bitcoin is a private cryptocurrency. Fiat will be used instead when the Reserve Bank starts issuing digital crypto currency, which you can carry in the cyber space with you, when you don't have to keep physical currency in your pocket.

In August, the Finance Ministry said it will work out a roadmap to regulate the use of virtual currencies such as bitcoins based on the report of an official committee that has suggested not to legalise them.

The Reserve Bank had also flagged possible "black money" risks from virtual currencies like bitcoin, to a parliamentary panel that they are "susceptible to misuse" by terrorists and fraudsters for laundering money.

The central bank had further said it has not given any licence and authorisation to any entity or company to operate such schemes or deal with bitcoin or any VC.

Kumar also added RBI's stance that any user, holder, investor, trader, etc. dealing with cryptocurenies will be doing so at their own risk, as it had previously informed the parliamentary standing committee on finance.

tags #Economy

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