‘Ensure safety of data on cryptocurrency’

Even as the Reserve Bank of India (RBI) is exploring introduction of an official virtual currency in the country, industry body Assocham has cautioned that extreme care must be taken to ensure safety of the data trail that the crypto currency could leave as it changes hands through a range of electronic devices and platforms.

“Of course the inter-departmental study group of RBI would examine all the safety aspects when it starts work on exploration of the crypto currency which has been introduced by private parties in several parts of the world and has attracted a lot of attention. The need for safety is highlighted more by the recent and serious incidents of breach of the Facebook data of as many as 87 million users all over the world,” Assocham said in a statement.

Assocham secretary general D.S. Rawat said though the number of users affected by the Facebook data breach was less at about half a million in India, more and more Indians were going digital.

“While we cannot isolate ourselves from the ever rising number of technology platforms, each and every individual who would be using the virtual currency must be protected against fraud, data leak, etc.,” Mr. Rawat said.

According to Assocham, the liability of the RBI, as is the case with the hard currency, would be clearly defined in the case of virtual currencies.

“Different situations of usage of the virtual currency have to be simulated,” the chamber said.

Terming RBI’s move for virtual currencies as ‘pragmatic’ and ‘courageous’ Assocham recommended a high level of coordination among all the central banks for setting up some kind of a global oversight to guard against misuse of the new currency by anti-social elements, terrorists and enemy countries.

“The burning issue of privacy which is being debated and adjudicated by the Supreme Court would also need to be examined thoroughly from legal and other angles,” chamber said, adding that users had to be educated enough and a great amount of inter-face with departments such as tax authorities would be required for the introduction the currency as and when it happened.

“Thus, the inter-departmental committee of the RBI can even think of expanding its scope and consider presence of even private sector experts in the areas of cybersecurity, technology platforms and defence related strategic issues,” the statement added.

Meanwhile, after the RBI directive to banks and payment gateways to discontinue their services for purchase and sale of bitcoin and other virtual currencies, India’s leading bitcoin trading platform has cautioned its customers.

“We remain committed to keeping customer funds and assets secure, and are exploring various options. However, sudden disruption in banking services could affect our ability to service deposits and withdrawals, until banking services are restored,” Zebpay said in a statement, adding “please keep this risk factor in mind while making your investment decisions.”