Mumbai : The Reserve Bank raised concerns over the complex methodologies being used to determine the values of the virtual currencies (VCs) like bitcoins and litecoins. “As a currency I do worry a little bit when the underlying fluctuates tremendously. One of the values of a currency is some stability.
“Who will maintain value – can we have confidence in an unseen, unknown centre which will maintain the value of the currency or an algorithm which will maintain the value of the currency,” RBI Governor Raghuram Rajan said at a Nasscom function here.
The RBI, he said, is currently studying the issue and will come out with a “considered view” on virtual currencies soon. The apex bank had, in late December, come out with an advisory for potential investors about the perils of investing in virtual currencies.
If a “currency is a target of speculation as opposed to primarily a means of exchange, it does create some concerns for the user,” he said. According to some estimates, there are 30,000 people in India who are in possession of 1% of around 12 million bitcoins in circulation across the globe.
He also said the Reserve Bank of India has not yet taken a decision on the Nachiket Mor-led Committee’s recommendation to allow payment banks.
As per the committee’s report, payments banks, given their zero-risk of default, will require a minimum entry capital requirement of 500 mln rupees compared to 5 bln rupees required for full-service scheduled commercial banks.