According to Government of India, cryptocurrencies like Bitcoins are not legal tenders and using them can mislead into money laundering speculations. This has not at all frightened the business giant Reliance to try their luck and potential into the field of virtual currencies. Being successful in interrupting telecom sector, they expect no failures getting with cryptocurrencies or virtual currencies. JioCoin is the cryptocurrency, Reliance is planning to launch soon.
According to a news report by Mint, eldest son of Mukesh Ambani, Akash Ambani will lead the team of 50 members who will be responsible for developing plans and decisions for their virtual currency. The company disrupting telecom sector is yet again in action to rework the overall ecosystem of electronic trading and commerce with their very own blockchain based decentralized currency, which is widely used in foreign countries because of the success bitcoin currency was able to pull off.
Many companies like Kodak, Telegram and Bank of England have created their own sort of electronic currency sharing bitcoin similarities. Moreover, countries like Russia, Sweden, Singapore, South Korea, and Venezuela have encouraged the use of electronic currencies, unlike India.
Finance minister Arun Jaitley stated that bitcoins are the virtual currency with many risks involved and no legal tender. According to a survey conducted on major digital currency exchanges by Income Tax Authority of India, India is reportedly having about 6 lakh active cryptocurrencies traders with over 1300 virtual currency functioning worldwide. India has 11 exchanges trading virtual currencies.
RBI had issued warnings to investors stating that no licence or authorization has been provided to the entities dealing with cryptocurrency schemes or bitcoins.
Here are the reasons why RBI thinks cryptocurrency poses risks to investors:
- RBI says virtual currencies are stored in an electronic wallet in a database at a server. The data is in digital form. Any security threats or malware attacks from hackers can cause losses to investors. Since, they don’t have a central agency governing all the transactions, loses happening could be permanent.
- With no established framework, there would be no regulating agency to hear the problems and disputes of investors.
- Virtual currency does not back any asset occasionally leaving its intrinsic value to zero.
- Many exchange platforms are working with no clear legal status. This makes the investor exposed to financial risks and held responsible for the losses.
- Virtual currencies are largely used for illegal purpose around the world.
Despite all major risks, Reliance is not giving up the idea coming up with their own virtual currency. In fact, the company aims to do its best in arranging for highest security options to prevent any security threats from hackers. JioCoins is now in the initial stage of development.