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India’s Central Bank Says Bitcoins Have No Value Backing Them – Kinda Like Paper Currency

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English: Total Bitcoin supply over time. Start...

English: Total Bitcoin supply over time. Starting in 2009, the Bitcoin supply is created at a rate of approximately 50 bitcoins every 10 minutes. Every 210,000 generations (about every four years), the creation rate is cut in half (i.e. 50, 25, 12.5, 6.25, etc.) and tends to zero, such that there will never be more than 21 million total coins created. (Photo credit: Wikipedia)

India‘s largest bitcoin exchange service has suspended its operations, just when the most valuable currency in the world had begun to gain widespread recognition in the country. The central bank cautioned against the risks of using virtual currency.

The Reserve Bank of India has warned users, holders and traders  of virtual currencies, including bitcoins, about “potential  financial, legal, customer protection and security related  risks” they are exposing themselves to.

There is no underlying or backing of any asset for virtual  currencies. As such, their value seems to be a matter of  speculation,” the central bank contended in a statement, adding that the   huge volatility in the value of virtual currencies has  been noted, however.

The Reserve Bank of India emphasized that virtual currencies were  not authorized by any central bank or monetary authority,  thus posing serious risks to their users.  

“There have been several media reports of the usage of  virtual currencies, including bitcoins, for illicit and illegal  activities in several jurisdictions. The absence of information  of counterparties in such peer-to-peer anonymous/ pseudonymous  systems could subject the users to unintentional breaches of  anti-money laundering and combating the financing of terrorism  (AML/CFT) laws,” it stated.


Written by voiceoftruthusa

December 28, 2013 at 11:43 pm

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