Cryptocurrencies Will Boost Illegal Transactions: RBI

• 21 Jul 2018

• The Reserve Bank of India (RBI) informed the Supreme Court that dealing in cryptocurrency will encourage illegal transactions.
• According to the RBI, Cryptocurrencies are “a stateless digital currency” in which encryption techniques are used for trading and these ‘currencies’ operate independently of a Central bank, rendering it immune from government interference.
• An interdisciplinary committee headed by secretary of economic affairs Subhash Garg was set-up in 2017 to examine virtual currencies and recommend the regulatory framework for crypto currencies.
• The RBI had already issued a circular prohibiting use of these virtual currencies.

Cryptocurrency

• A cryptocurrency is a digital or virtual currency that uses cryptography for security.
• Cryptocurrencies use decentralized technology to let users make secure payments and store money without the need to use their name or go through a bank.
• They run on a distributed public ledger called blockchain, which is a record of all transactions updated and held by currency holders.
• The most common cryptocurrencies are Bitcoin, Ethereum, Ripple, and Litecoin.