#CyberHeadlines: Rupee Update
India updates its currency for security reasons
The Reserve Bank of India (RBI) recently announced that they are updating the rupee as well as withdrawing 500 and 1,000 rupee notes from circulation. The asserted reasoning behind this decision is to cut back on crime incentives and make the rupee harder to counterfeit. All Rupees have added physical security measures to ensure an inability to illegally copy them, but withdrawing the 500 and 1,000 rupee notes may have bigger security risks than RBI had realized. Since the extraction of 500 and 1,000 rupee notes from circulation, bitcoin purchases in India have grown exponentially. According to the Hindustan Times, queries for bitcoins have gone up from 20% to 30% within just a few days of the announcement. Bitcoins, basically, amount to digital cash, making bitcoins appeasing to those wanting to store their money out of Dehli’s reach, which ultimately causes more opportunity for crime. Since bitcoins cannot be traced back to their source, it is much easier to engage in illegal activity with bitcoins and much less likely one will get caught. I understand the thinking behind this change in currency, but I’m curious to see how crime changes in reaction. Crime will always happen; it won’t ever go away; it will only evolve.
A couple years ago, the Washington Post published an article about the uncertainty, and possible pitfalls, of investing in bitcoins when a company which managed bitcoin investments stopped all transactions, keeping their investors’ money. Nothing could be done to force them to disclose their claimed issues. An alert from the North American Securities Administrators Association stated “The value of bitcoins and other digital currencies is highly volatile and the concept behind the currency is difficult to understand even for sophisticated financial experts,” in an alert. The association’s spokesman Bob Webster was also quoted saying, “state securities regulators are concerned that the popularity of digital currency can provide con artists with fertile soil to grow a new generation of scams. Investors need to be aware that investments based on virtual money present real risks, including the possibility of being bitconned.” In short, increased use of bitcoins leads to increased incentives for committing crimes.