Bitcoin Union advises public to stay off trading; Bitcoins per se are not illegal in India: Nishith Desai

btcAfter RBI issued a warning against virtual currencies in late December, several bitcoin operators suspended their operations. And now a bitcoins traders’ body has asked RBI to give some clarity on the legality of these digital currencies, acknowledging that this business is extremely volatile and common people should stay away from it.

This group of bitcoin traders have engaged a lawyer Nishith Desai for the same. “Our Bitcoins Practice Group examined the issue from techno-legal perspective, and we have found that Bitcoins per se are not illegal in India. This is in consonance with international approach” said Nishith.

He also added that “If you are getting into serious business (of trading/ investing in bitcoins), it is very volatile, and ordinary people should refrain from doing it

Even though RBI warns people against the potential risks that these virtual currencies possess, it hasn’t exactly clarified whether their use is illegal or not. However,  Enforcement Directorate has raided a few bitcoin operators offices, on the premise of violation of foreign exchange regulations, and have announced that an arrest will follow if money laundering is confirmed.

There around 30,000 bitcoin holders in the country, and without a proper issued framework, the usage and trading have been suspended. Globally, bitcoin is rapidly picking up pace. Whether or not it will become a mainstream currency is still unknown. In India, for online transactions, credit cards, debit cards, net banking and cash on delivery are dominant. Even mobile payments and wallets are still in a nascent stage. How much will the expensive currency, bitcoin, will penetrate in the country, depends on the Government’s regulations and bank policies.

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To contact the author, write to sugandh.dhawan@wirefootindia.com

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