Cryptocurrency in India Not Banned Says RBI

The Reserve Bank of India has recently stated in a Supreme Court petition that virtual currencies are not illegal, and citizens of India may invest in them if they so wish.

It was assumed that trading of these currencies was illegal due to the RBI placing restrictions on banks within India, however this is not the case. These restrictions were simply put in place to try and stop terrorism financing, as well as other risks that virtual currencies may pose for banks and institutions.

The central bank did not ban all cryptocurrencies but stated that certain companies should not be involved with bitcoin and other virtual currencies as the risks may be higher than the rewards.

“Firstly, the RBI has not prohibited VCs (virtual currencies) in the country. The RBI has directed the entities regulated by it to not provide services to those persons or entities dealing in or settling VCs… The RBI has been able to ringfence the entities regulated by it from being involved in activities that pose reputational and financial risks along with other legal and operational risks.” The RBI said.

This poses the question, should we just be able to take the risks we want and deal with the consequences ourselves, or is it preferred to let the government try and protect you before you make a mistake?