The Reserve Bank of India (RBI) told the Supreme Court to discourage the use of cryptocurrencies, like Bitcoin. RBI has also issued a circular prohibiting the use of these currencies as it will pose a major threat to the economy.
Cryptocurrencies are ‘a stateless digital currency’ in which encryption techniques are used for trading. It is designed to work without being dependent on Central Bank or any intermediaries. However, the concept is losing its stability as many investors are doubting the credibility and are not willing to take any risk.
Many economists believe that virtual currencies will promote illegal transactions. Illegal dealings on anonymous or untraceable websites including child prostitution and drugs will be on the rise using cryptocurrency. Experts also deny considering cryptocurrency as a medium of exchange as they are certain that it will ruin the economy.
The federal bank and the central government sought three weeks time from the bench to tackle the cryptocurrency issue. Many petitions alleged that judiciary has to frame a set of guidelines to regulate the use of the virtual currencies. The judiciary has held the final hearing on September 11.
As reported by the Economic Times, there are a few petitions that have challenged the RBI notification on ‘Prohibition of Dealing in Virtual Currencies’. Nevertheless, the apex court of India has barred all the pending cases regarding cryptocurrency and refuse to entertain any plea in the future.
While Thailand has legalized cryptocurrency, there are many conventional countries who refuse to validate it as they fear the consequences. However, there are investors who are using this opportunity to their advantage to make a huge amount of money. Overall, due to negative criticism, the underlying concept of cryptocurrency is losing its footing. Whether or not this concept will catch the momentum, is the big question.
The post Cryptocurrency Poses Major Threat: RBI appeared first on OWLT Market.
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