India's Central Bank issues another bitcoin warning

The Reserve Bank of India has rung the alarm bells on cryptocurrencies for the second time this year

What has happened?

The Reserve Bank of India (RBI) has issued a warning on cryptocurrencies, and bitcoin specifically, for the second time this year.

What does this mean?

With a short public notice, the RBI has cautioned “users, holders and traders” of cryptocurrencies, such as bitcoin, about “potential economic, financial, operational, legal, customer protection and security related risks” in dealing with virtual currencies.

In a repeat of its February warning, the RBI reiterated its position of not authorising or licensing “any entity/company to operate such schemes or deal with Bitcoin or any virtual currencies”.

India’s central bank issued its first warning against bitcoin in 2013.

Unlike previous alerts, this latest notice also warns against initial coin offerings (ICOs).

The central bank said:

"In the wake of [the] significant spurt in the valuation of many [virtual currencies] and rapid growth in… ICOs, RBI reiterates the concerns conveyed in the earlier press releases."

This warning from India's RBI is the latest in a spate of warnings by regulators around the globe cautioning investors about the dangers of ICOs, including only in the past few weeks Germany, Finland, Sweden and the European Securities and Markets Authority.

Next steps

If you want to take advantage of blockchain's huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.

Contacts
John Salmon
Partner
London
Languages English
Topics Blockchain

 

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