Bitcoin breaks through $18,000, and the Indian central bank issues a third warning

The digital currency Bitcoin is skyrocketing at a phenomenal rate, leading to a frenzy of buying the currency in many countries around the world.

As of press time, the price of Bitcoin in the Japanese and Korean markets has exceeded the $20,000 mark, while the price of Bitcoin on US exchanges including GDAX and Gemini has exceeded $17,000. According to data from coinmarketcap.com, the average price of Bitcoin across the entire network has reached $18,268, equivalent to RMB 120,000.

While the bitcoin bull run has gained traction, financial regulators in emerging economies are still trying to find a way to make sense of it.

Seven Chinese ministries have jointly closed domestic Bitcoin exchanges, while Indonesia and Bangladesh have banned the use of digital currencies such as Bitcoin as a means of payment.

In India, the government has made it clear that while it does not recognize Bitcoin as legal tender, it has not introduced guidelines for Bitcoin transactions.

In the absence of any specific legal regulatory framework, Bitcoin has seen explosive growth in India.

What's Behind the Bitcoin Gold Rush?

This week, the Reserve Bank of India issued a third warning, saying: "Users, holders and traders of virtual currencies may be exposed to risks including economic, operational, legal, consumer protection and security risks."

But is anyone listening?

Experts claim that the extremely strong demand for Bitcoin in the Indian market has pushed the price of Bitcoin in the region to nearly 20% higher than the international market price.

Currently, there are at least 11 Indian bitcoin exchanges operating, with approximately 30,000 users actively trading every day.

What is Bitcoin used for?

Bitcoin has two main characteristics: it is digital and is considered an alternative currency.

Bitcoin is different from the paper money or coins in your pocket. It exists online.

Second, Bitcoin is not issued by governments or traditional banks.

A few companies, including Expedia and Microsoft, accept Bitcoin.

However, the vast majority of users do not buy and sell Bitcoin as a currency, but rather as a financial investment.

"Last year we had only 100,000 registered users, and now that number has soared to 850,000," Satvik Vishwanathan, co-founder of Unocoin exchange, told reporters.

Not just online transactions, some Indian e-commerce platforms have also begun to recognize this digital currency.

With the popularity of Bitcoin, other digital currencies such as Ethereum and Litecoin have also attracted many investors.

So, is it time for the government to clarify its policy?

"This is a space that is going through a revolutionary change. There are huge advances happening here, technology is always ahead of government, it's a big disruption. It's important that we keep up with the technology and adapt accordingly, and that we have cross-departmental discussions to move it forward," the chief executive of Niti Aayog, the prime minister's think tank, told the BBC.

For current Bitcoin investors, perhaps the biggest bright spot is the recent green light for Bitcoin futures trading in the U.S. This decision has stimulated the recent Bitcoin boom, but Wall Street banks are increasingly worried that heavyweights like Buffett will label Bitcoin a "real bubble."

What do you think?