Assets, Bitcoin

Is Bitcoin Approved by RBI?

The Reserve Bank of India (RBI) has not yet given its official verdict on Bitcoin, the world’s most popular cryptocurrency.

This is in contrast to other major countries like the US, where the Internal Revenue Service has ruled that Bitcoin is to be treated as property for tax purposes. In China, meanwhile, the central bank has banned financial institutions from handling Bitcoin transactions.

So what is the RBI’s stance on Bitcoin? At the moment, it appears to be one of “wait and see”. In a statement released in December 2013, the RBI said that it had “not given any licence or authorisation to any entity or company to operate such schemes or deal with Bitcoin”.

NOTE: This is a warning note about the question “Is Bitcoin Approved by RBI?”

Bitcoin is not approved by the Reserve Bank of India (RBI) and its use as a currency or investment product is not regulated or authorized by the RBI. Therefore, any transactions related to Bitcoin are not authorized or supervised by the RBI. Trading, buying, selling, or investing in Bitcoin or any other cryptocurrency carries financial, legal and other risks. You should conduct your own research and consult with a financial advisor before engaging in any kind of cryptocurrency trading activity.

You should be aware that participation in Bitcoin transactions is at your own risk and you could lose all of your invested capital. Additionally, there are various frauds that exist in the market associated with cryptocurrencies, so please exercise caution when engaging in cryptocurrency related activities.

The statement went on to say that the RBI had “ cautioned users, holders and traders of virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security-related risks that they are exposing themselves to”.

Essentially, then, while the RBI has not explicitly banned Bitcoin, it has warned people about the risks associated with it. This is hardly surprising given the volatile nature of Bitcoin’s price.

In recent months, we have seen the value of Bitcoin soar to new heights only to come crashing back down again. This sort of volatility is enough to put off even the most risk-loving investors.

Given all this, it seems unlikely that the RBI will give its seal of approval to Bitcoin any time soon. For now at least, it looks like India will remain a cautious observer of the cryptocurrency phenomenon.

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