RBI has no legal right to ban use of bitcoin: Na Vijayshankar

RBI indiabitcoin22 Dec 2013 / Times of India – It started out as a geeky vision, an open source, peerto-peer payment network “mined” by computers solving mathematical puzzles and stored in a digital “wallet”. Today, its fluctuating prices are monitored like any other currency, by investors and critics alike. While today the Indian share of the Bitcoin market is small, Na Vijayshankar, cyber law expert and former banker, tells Narayanan Krishnaswamy, that by exercising caution, potential investors can hit pay dirt.

What do you make of the Bitcoin hype?

The hype has come about because of the sudden increase in the exchange value to the unbelievable levels of $1,000 over just a couple of months. The sudden rise in price has attracted the attention of speculators around the world who see it as a good way to make easy money.

Regulators were taken aback when they heard of a so-called “coin” being used for payments on websites initially and other offline uses subsequently. Simultaneously, the emergence of Bitcoin exchanges appearing to look like stock exchanges made people wonder if a parallel economy has emerged without their knowledge.

You’ve said it is risky to call Bitcoin a cybercurrency. Why is it safer to call it a document?

When Bitcoin is represented as a “currency” the public may mistake it for a “legal tender” (a medium of payment recognized by a government, which in India, means notes issued by RBI). Since Bitcoin is not legal tender and does not have the backing of any authority it would be misleading to call it currency. A person selling Bitcoins under this perception may be accused of committing fraud…… Read more



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