As bitcoin is seen as the next big thing because to its anonymous nature, the world is taking stern steps, including India, to make limit the use of such currencies as it is being seen as a security threat. The increasing popularity among the Indian citizens had forced Reserve Bank of India (RBI) to intervene.
On Tuesday, (December 5), RBI stepped-in and warned investors against betting on bitcoin and other cyrptocurrencies.
“So there’s only one thing we can do—watch it from the bank of a river,” Pan Gongsheng, deputy governor of the People’s Bank of China, said at an event in Shanghai. “One day you’ll see bitcoin’s dead body float away in front of you.”
Indian central bank is more vocal about the use of bitcoin, and asked the people to be cautious while investing in such virtual currencies, they said, “cautioning users, holders and traders of virtual currencies (VCs), including Bitcoins regarding the potential economic, financial, operational, legal, customer protection, and security-related risks associated in dealing with such VCs.”
The warning came amidst the bitcoin’s value soared as high as 1,000% this year itself. The price of bitcoin doubled in a month, from Rs 4.55 lakh on November 01, 2017, to Rs 8.6 lakh on December 5, 2017. The reason behind such a steep price surge in bitcoin is stated to be the buying frenzy among the Indian customers
In fact, measures to curb the use of cryptocurrencies have been gaining momentum across Asia. The banks in Indonesia and Bangladesh have been bared the use of bitcoin as an alternative system of payment. In September, China brought down the use of bitcoin exchanges and banned initial coin offerings.
Other regions across the globe, too, have raised the alarms. On, November 29, the vice-president of the European Central Bank warned against investing in bitcoin at such high prices. The governor of the Bank of France cautioned against its potential hazards, as did Russian president Vladimir Putin and Germany’s central bank.
Meanwhile, rallying past all warning signs, bitcoin is at a record high, having crossed the $12,000 mark today (Dec. 06).
The Indian government has also warned the public of bitcoins’ unprecedented hike in prices and asked the public to refrain investing in the same.
On Nov. 30, finance minister Arun Jaitley said India does not recognise virtual currency as legal tender. Earlier this year, a committee set up by his ministry had reportedly recommended banning cryptocurrencies over fears that they could be used to launder money and perpetuate frauds.
Yet, cryptocurrency exchange operators remain unfazed.
“If India had to ban virtual currencies, they would have done that by now. In the last three years, the RBI’s statement has been the same: They are uncomfortable with it and people should invest at their own risk,” Vivek Steve Francis, CEO of Coinome, a cryptocurrency-trading exchange, told Quartz late last month.