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The Reserve Bank of India today said they are looking at fiat cryptocurrencies but is not comfortable with bitcoins or virtual currency.

Sudarshan Sen, RBI Executive Director, said, "Right now, we have a group of people who are looking at fiat cryptocurrencies. Something that is an alternative to the Indian rupee, so to speak. We are looking at that closely".

A fiat currency is a legal status given to a currency issued by the central bank.

"As regards non-fiat cryptocurrencies, I think we are not comfortable non-fiat cryptocurrencies like bitcoins, for example", Sen said at a fin-tech event by KPMG.

According to him, Bitcoin is a private cryptocurrency. "Fiat will be instead the Reserve Bank starts issuing digital cryptocurrency, which you can carry in the cyberspace with you when you don't have to keep physical currency in your pocket, that's the way", he said.

Last month, the Finance Ministry said it will work out a roadmap to regulate the use of virtual currencies such as bitcoins based on the report of an official committee that has suggested not to legalize them.

According to a PTI report, Reserve Bank had flagged possible "black money" risks from virtual currencies like bitcoins, to a parliamentary panel that they are "susceptible to misuse" by terrorists and fraudsters for laundering money.

The Reserve Bank of India further said it has not given any license and authorization to any entity or company to operate such schemes or deal with bitcoins or any virtual currency.

As such, any user, holder, investor, trader, etc. dealing with VCs will be doing at their own risk, the RBI informed the parliamentary standing committee on finance.

An interdisciplinary committee, which includes a RBI representative, has been constituted by the Finance Ministry to examine the regulatory framework with regard to virtual currencies, the central bank had said earlier.

News Source: Money Control

Last modified on Monday, 29 January 2018