e-commerce

Government Says Use of Bitcoins and Virtual Currencies Not Authorised By RBI

The government has declared the use of bitcoins and virtual money illegal. Credit: Reuters/Files

The government has declared the use of bitcoins and virtual money illegal. Credit: Reuters/Files

The government today (March 28) said the use of virtual currencies like Bitcoins is not authorised by the RBI and could result in a breach of anti-money laundering provisions.

The RBI has already cautioned users, holders and traders of virtual currency, including Bitcoin, about the potential financial, legal and security risks arising from the usage.

“The absence of counter parties in usage of virtual currencies including Bitcoins, for illicit and illegal activities in anonymous/pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism laws,” minister of state for finance, Arjun Ram Meghwal, said in a written reply to the Rajya Sabha.

He further said that the creation of virtual currencies like Bitcoins as a medium of payments is not authorised by any central bank or monetary authority.

“No regulatory approval, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities,” Meghwal said.

The RBI had earlier warned that any user, holder, investor and trader dealing with virtual currencies would be doing so at his or her own risk.