Cryptocurrencies will boost illegal transactions: RBI to SC

Cryptocurrencies will boost illegal transactions: RBI to SC

News:

1. The RBI recently said dealing in cryptocurrency will encourage illegal transactions.

Important facts:

2. Earlier also, the RBI has issued a circular prohibiting use of these virtual currencies.
3. Cryptocurrencies:

• Cryptocurrencies are “a stateless digital currency” in which encryption techniques are used for trading.
• These currencies operate independently of a central bank like the RBI, “rendering it immune from government interference”.

4. A committee has been set up by the Centre to deal with issues relating to cryptocurrencies.
5. The apex court had also sought the assistance of Attorney General K.K Venugopal in the matter.
6. The RBI, through its circular, had directed banks and financial institutions to freeze the bank accounts of those individuals and companies dealing in the illegal trade of virtual currencies.
7. One of the Petitioners gave directions to the Centre to take steps to restrain sale and purchase of illegal cryptocurrencies like Bitcoins. These currencies were being traded openly for “illegal activities” like funding terrorism and insurgency.