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Bitcoin has been ‘drowned in controversy’ for its value, according to the Reserve Bank of India

The central bank has criticised Bitcoin as “not a legitimate currency” because it “doesn’t fulfil its core promise of decentralisation”, with a report stating the value of Bitcoin has fallen by over 100 per cent in the past week.

In a paper to be presented at the 18th Central Bureau of Investigation (CBI) Annual General Meeting (AGM) on November 25, Reserve Bank president Raghuram Rajan said the central bank is “concerned” about Bitcoin’s value and said “Bitcoin has been drowning in controversy”.

Bitcoin has a limited supply of Bitcoins, but it is not illegal to mine them, making it a viable investment option.

However, it is still illegal to accept bitcoins for any financial purpose, and any attempt to “manipulate” Bitcoin’s price or its market value could trigger legal action from the central banking institution.

Rajan, however, did not name any Bitcoin companies or individuals as his witnesses.

The Reserve Bank is also concerned that the growth of the Bitcoin economy is a serious threat to the financial stability of India.

The central banker said the “unstable nature” of the currency and the lack of liquidity in the financial system is a “serious problem”.

Rajans report on Bitcoin comes at a time when Bitcoin has become a popular investment vehicle in India and has seen its value surge over the past couple of weeks, with the virtual currency trading at over $15,000 per coin in India on Wednesday alone.

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