The Economic Offences Wing of India has reiterated warnings from the Reserve Bank of India (RBI) asking the public to avoid dealing with digital currencies, especially the stand-alone Bitcoin (BTC), Ether (ETH), and Ripple (XRP).
The special unit of the Tamil Nadu police department expressed that digital currency is not a derivative, and going with the country’s definition of currency, cryptocurrencies are not a currency as generally publicized, According to reports from local media The Hindu.
Most of these popular digital currencies such as Bitcoin, Ether, Ripple XRP, and Litecoin do not have any sovereign guarantee that backs them; therefore, they are not considered legal tender. However, they are similar to gold, which behaves more like assets.
Another major problem with cryptocurrencies is the fact that they are mostly not regulated by any government agency or a regulatory watchdog, unlike other investment avenues. As such, crypto investors or traders in the country won’t be able to consult any official authority over any Industry-related grievances because these cryptocurrencies are not recognized as legal tender by the government.
Stop Dealing With Cryptocurrency For Risk Sake
To prevent loss of investments, the police advised residents not to trade or hold cryptocurrencies. Trading them will only be at their risk since the government has not licensed any entities to deal with digital currencies.
Similarly, the country’s central bank warned the public against holding or trading digital currencies, citing several risks associated with them, such as money laundering, consumer protection, etc. The RBI also warned entities under its oversight to deviate from handling virtual currencies services.
The central bank, meanwhile, plans to develop India’s digital currency appropriately, as Coinfomania reported on December 6, 2019.