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India’s biggest Bitcoin operator halts trade

Updated December 28, 2013

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— Reuters (File Photo)
— Reuters (File Photo)

NEW DELHI: India’s biggest Bitcoin trading platform said on its website on Friday it had suspended operations after the central bank warned against the risks of using virtual money.

BuySellBitCo.in closed its platform, citing an advisory by the Reserve Bank of India issued on Christmas Eve highlighting the risks of trading in digital currencies.

“We are suspending buy and sell operations until we can outline a clearer framework with which to work,” BuySellBitCo.in said on its website, adding the move was “to protect the interest of our customers”.

The central bank’s warning comes after Bitcoin, which can be stored either virtually or on a user’s hard drive and offers a largely anonymous payment system, had begun gaining popularity in India.

The emergence of Bitcoin and other virtual currencies in India has come despite a traditional preference for assets backed by property and other tangible goods.

“There is no underlying or backing of any asset for virtual currencies and as such their value seems to be a matter of speculation,” the bank said in its December 24 advisory.

The “huge volatility in the value of virtual currencies has been noticed”, it added. The central bank stopped shy of issuing a ban on Bitcoin or other virtual currencies.

However, because the currencies were not authorised by any monetary authority there was no established recourse for customers in the case of problems, the bank noted.

Bitcoin was invented in the wake of the global financial crisis by a mysterious computer guru using the pseudonym Satoshi Nakamotoby.—AFP