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Cryptocurrencies Will Boost Illegal Transactions: RBI

  • 21 Jul 2018
  • 1 min read
  • 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.
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