RBI Warning Suspends Bitcoin Operations in India

NEW DELHI (Scrap Monster) : Several Bitcoin Operators in India have ceased their business and halted trading following the cautionary advise issued by the Reserve Bank of India (RBI). The RBI had recently warned the public against the transaction of Bitcoin, the decentralized digital currency in India owing to various significant risks to the users.

It was on Dec 24 that RBI issued the advisory for cautioning public about the potential operational, financial and security related risks they might be exposed to with the use of such virtual currencies. Since the transactions through Bitcoins are not traceable by authorities, it also attracts crime.  RBI is still examining the issues related to the trading of Bitcoins and has not yet surfaced with a clear regulatory framework regarding the digital coins.

Amidst the regulation, a number of Bitcoin service providers were found to suspend their business in India, with many websites deactivating their operations indefinitely. INR BTC was one among them to shut down their operation in light of the RBI warning. Bitcoins that was gaining quick favor in India was reported to acquire more than 35,000 downloads ever since its launch on November 2008.

According to RBI, such digital coins are easily prone to be hacked by losing the password or by malware attack leading to the permanent loss of the currencies. Earlier, China and France had also bashed thier financial institutions from trading Bitcoins.