The process of regulation of Bitcoins around the world has started. Initially, Thailand banned use and dealing of Bitcoins in its jurisdictions. Then the People’s Bank of China (PBC) warned financial institutions against risks of fraud and money laundering due to use of Bitcoins.
Now it has been reported by TOI that the France’s central bank has warned against the use of the virtual currency Bitcoin, noting that it is not only highly volatile but also unregulated by authorities.
It seems the central banks around the world are now coming against the use of Bitcoins. However, the Reserve Bank of India (RBI) is still sleeping over the issue despite increase in illegal use of Bitcoins in India. The Indian approach towards Bitcoins is not at all conducive for national interest and Indian government must urgently regulate Bitcoins in India as soon as possible.
The Bank of France is skeptical about the currency, and underlined that the “highly speculative” currency poses a “certain financial risk” to users. “Even if the high volatility of the Bitcoin is of possible interest for individual or professional speculators, they should be aware of the risks they are taking,” the bank said. In addition, there are no official security guarantees for the electronic safes which store the virtual currency, making the user vulnerable to cyber attacks. Further, the convertibility of Bitcoin is not ensured and an investor could be unable to regain his investment.
The central bank noted that if a currency is to be used as a mode of payment, it should meet rules against money laundering, and its security platform should be monitored by the Bank of France. Nevertheless, the bank has no oversight of Bitcoin, and urged instead for action to prevent the virtual currency from being used in illegal transactions.
It is high time for Indian government and RBI to do needful in this regard.