Due to the absence of a centralized authority, such as a central bank, to guarantee the value of the currency and regulate transactions, there is no recourse in the event of any user or transaction-related issues or disputes. The value of virtual currencies is dependent on speculation and is not backed by an underlying asset or a regulatory framework. Due to this, virtual currencies may demonstrate major volatility. Similarly, there appears to be a high probability of virtual currencies being used in illegal activities.
Further, though unintentional, their usage could amount to breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws.
Therefore, cryptocurrencies, in the present form, may pose significant risks in terms of financial, operational, legal, customer protection and securityrelated risks to their users as well as to the economy.