RBI has set up a committee to study the feasibility of introducing a ‘central bank digital currency, considering the economic efficiency of digital currencies. The report will be submitted this year by end of June.
On the trading of crypto currency, RBI, Deputy Governor B P Kanungo said in the press briefing which followed the two-day meeting of the monetary committee of RBI, “Reserve Bank has repeatedly cautioned users, holders and traders of virtual currencies, including Bitcoins, regarding various risks associated in dealing with such virtual currencies. In view of the associated risks, it has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time.”
RBI has issued several notices in the past on the trading of crypto currency in India. While not declaring it illegal the government said it does not recognise the dealing in virtual currencies and whoever trade in Bitcoin and alternative coins should do it at their own risk.
Experts say with the banning of crpyto currency exchanges, people will start trading in cash. Riding on the popularity of Bitcoins and an extraordinary returns it gave in the past, there are many ponzi schemes that have been doing business in the market. They work like multi level marketing schemes and invest your money in a digital currency. They ask you to add members to your network and as the downline grows the scheme pays you more commission.