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RBI working on cryptocurrency policy

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RBI working on cryptocurrency policyReserve Bank of India appears to be preparing a policy on cryptocurrency, a virtual money used as a medium of exchange in many countries including India but is not legalised here.

Cryptocurrencies like bitcoin use cryptography to secure transactions.

RBI Deputy Governor NS Vishwanathan said that the policy was in the making at an event in Kolkata on Friday. “I can’t comment on a policy which is still in the making,” he said responding to a query on whether RBI would encourage the use of cryptocurrency.

RBI is, in fact, exploring a possibility of issuing its own fiat cryptocurrency while it is not comfortable with non-fiat or private cryptocurrency like bitcoin.

Last month, RBI executive director Sudarshan Sen said that an internal group was exploring the possibility of issuing it while China has banned bitcoin exchanges a leading to sharp drop in cryptocurrency flows worldwide.

The regulator has repeatedly expressed concerns over the proliferation of the use of virtual currencies saying these carry potential financial, legal and security-related risks. Vishwanathan said RBI was mapping the shadow banking entities exist in the country as the regulator looks to protect customers from financial risks.

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