RBI look­ing into cryp­tocur­ren­cies, ‘not com­fort­able’ with bit­coin

Financial Chronicle - - COMPANIES -

The Re­serve Bank of In­dia (RBI) has a group look­ing into cryp­tocur­ren­cies as le­gal ten­der, a se­nior of­fi­cial said on Wed­nes­day, but em­pha­sised the cen­tral bank’s dis­com­fort with bit­coin, which has re­cently come un­der in­tense global reg­u­la­tory scru­tiny.

“Fiat will be when the Re­serve Bank, for ex­am­ple, starts is­su­ing dig­i­tal cur­rency which you can carry in cy­berspace, you don’t have phys­i­cal cur­rency in your pocket,” Su­dar­shan Sen, an RBI ex­ec­u­tive di­rec­tor, said at a Fin­Tech con­fer­ence in Mum­bai.

“As re­gards non-fiat cryp­tocur­ren­cies, I think, we are not com­fort­able with them,” Sen added.

The cen­tral bank had not pre­vi­ously dis­closed its plans on cryp­tocur­ren­cies and Sen did not pro­vide any de­tails on where dis­cus­sions on the is­sue stand.

It was un­clear whether the group at the RBI plan to is­sue a rec­om­men­da­tion on cryp­tocur­ren­cies to the govern­ment, or if the re­view is at an early or ad­vanced stage.

Bit­coin is a dig­i­tal cur­rency that en­ables in­di­vid­u­als to trans­fer value to each other and pay for goods and ser­vices by-pass­ing banks and the main­stream fi­nan­cial sys­tem.

Bri­tain’s Fi­nan­cial Con­duct Au­thor­ity (FCA) On Tues­day warned that ini­tial coin of­fer­ings, the prac­tice of cre­at­ing and sell­ing dig­i­tal cur­ren­cies to fi­nance start-up projects, are “very high risk” and spec­u­la­tive.

Jamie Di­mon, chief ex­ec­u­tive of JP­Mor­gan Chase, also came out against bit­coin this week dub­bing it a “fraud”, and adding that it will blow up. The vir­tual cur­rency has more than quadru­pled in value since Dec to more than $4,100.

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