Mumbai: With growing interest and reporting about virtual currencies like bitcoins, the Reserve Bank of India (RBI) has said these are highly speculative and unregulated instruments, cautioning users about the potential financial, operational, legal security risks.
(Also read: What bitcoin really is and how it is used)
The RBI said in a release on Tuesday that the creation, trading or usage of "decentralised digital currency" or "virtual currency" (VC), including bitcoins, litecoins, bbqcoins and dogecoins, as a medium for payment is not authorised by any central bank or monetary authority.
"No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying out such activities," it said, adding that it is keeping tabs on the developments.
Stating that virtual currencies have no underlying or backing of any assets and their value seems to be a matter of speculation, the RBI said, "The users are exposed to potential losses on account of volatility in value."
Since virtual currencies are stored in digital or electronic media - called electronic wallets - they are prone to losses arising out of hacking, loss of password, compromise of access credentials and malware attack, the apex bank cautioned.
(Also read: What bitcoin really is and how it is used)
The RBI said in a release on Tuesday that the creation, trading or usage of "decentralised digital currency" or "virtual currency" (VC), including bitcoins, litecoins, bbqcoins and dogecoins, as a medium for payment is not authorised by any central bank or monetary authority.
"No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying out such activities," it said, adding that it is keeping tabs on the developments.
Stating that virtual currencies have no underlying or backing of any assets and their value seems to be a matter of speculation, the RBI said, "The users are exposed to potential losses on account of volatility in value."
Since virtual currencies are stored in digital or electronic media - called electronic wallets - they are prone to losses arising out of hacking, loss of password, compromise of access credentials and malware attack, the apex bank cautioned.
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