RBI Opposes Cryptocurrency Due to Market Risks and Volatility Concerns

The Reserve Bank of India (RBI) has expressed its opposition to virtual digital assets like cryptocurrency. According to Upstox, RBI's stance is rooted in concerns about market risks and volatility associated with these assets.

The RBI circular dated July 6, 2022, issued by the National Stock Exchange, BSE, and MCX, cautions investors against dealing in unauthorised collective investments or portfolio management schemes. It specifically warns against sharing trading credentials, trading in leveraged products without proper understanding, and writing/selling options based on tips without knowledge of the product's risks.

The RBI has also established an Online Dispute Resolution Portal (ODR) for resolving disputes in the Indian securities market, which streamlines the existing dispute resolution mechanism and offers online conciliation and arbitration to benefit investors and listed companies.