RBI issues warning on Bitcoin trade, says bubble could burst in a spectacular fashion
The Reserve Bank of India (RBI) on Tuesday once again flagged concerns about Bitcoins, amid the cryptocurrency's surge in valuation, saying that the bubble could burst in a spectacular fashion.
The RBI said it wanted to reinforce its previous message to "users, holders and traders of Virtual Currencies (VCs) including Bitcoins regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with such VCs."
The statement was issued after the cryptocurrency, which trades 24 hours a day and seven days a week, climbed as high as $11,799.99 on the Luxembourg-based Bitstamp exchange on Sunday. However, it had slipped back to around $10,919, down 2 percent on the day but still up more than 100 percent over the past three weeks. Sunday's high marked a 1,121 percent increase since the start of the year.
The RBI had previously said those trading in virtual currencies were doing so at their own risk, given that the central bank has not given a licence or authorisation for any company to deal in such cryptocurrencies.
Bitcoin rose to a record high of $11,850 on Tuesday, continuing its surge from below $1,000 at the start of the year.
The cryptocurrency was last up 2 percent on the Bitstamp exchange.