India could issue warning against Bitcoin

India could issue warning against Bitcoin

Summary: With the unregulated virtual digital currency Bitcoin gaining both acceptance and momentum, India could soon issuing a warning against Bitcoin transactions to guard against terrorism and investment risks.

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Indian authorities may soon issue a public advisory against the potential risks associated with transaction using the digital virtual currency Bitcoin, reports The Times of India. The biggest worry for all of those involved is currently focused on the obvious, money laundering. As Bitcoin is traded on only a handful of global exchanges across the world, clearly there are risks involved, in addition to the instability of the value of Bitcoin. Within the past week, Bitcoin has spiked between US$800 to past US$1,200. As such, pressure has increased on regulatory and enforcement agencies in India to issue a warning regarding Bitcoin, following recent similar moves both in China and France.

Within India, digital currency is not regulated as rules haven't even been drawn up in regards to which jurisdiction regulation would fall under. In the US, all prevailing laws regarding money laundering already apply to Bitcoin, while in China, banks and other financial institutions have been asked not to deal in Bitcoins.

What makes Bitcoin a target for money laundering is that the source of traditional hard currency converted Bitcoin is unknown, as no records are being kept. Furthermore, experts believe Bitcoins could also be used to finance terrorist attacks, which is an obvious concern in India, considering its neighborhood.

Bitcoin could potentially be used in real estate dealings across India, and as most already know, real estate in metros such as New Delhi and Mumbai is a high priced commodity. For years, money has been laundered through real estate across India, and as such, introducing Bitcoin to the equation makes tracing the source even harder.

However, for those who have legitimate reasons to use Bitcoin, from what I understand, there aren't any options in India at the moment. It simply appears people who are aware of Bitcoin and its potential are simply investing in another commodity, such as gold, for long term gain. Of course eventually a time will come where Bitcoins could be used for retail purposes in India, either storefront or online. But then again, I don't see any Indian retailers such Flipkart or SnapDeal accepting Bitcoin at the moment.

The main issue with Bitcoin, even for legitimate purposes, is its constant fluctuating value. This would result in different prices for products and services every day, which could end up costing retailers more in the long run. If anything, those in India who already have invested in Bitcoin have a solid investment, for now at least. If the Indian government imposes restrictions or bans Bitcoin India, then those who've invested will be in massive sell off, that's for sure.

Topics: E-Commerce, Banking, Legal, India

Nitin Puri

About Nitin Puri

Originally from Canada, Nitin has been residing and working in India since 2009. He has worked in different ICT industries in countries such as India, Canada, and Tanzania. He is an avid follower and application developer within the growing mobile phone sector in India.

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5 comments
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  • or

    The central banking system is in a panic because they know their control is being threatened.

    I guess my question is, is the bitcoin stapled to the value of another currency or is it isolated?
    slickjim
  • Bitcoin isn't matched up against any other currency.

    Slickjim,

    Bitocin isn't matched up against any other currency. It can either be purchased on selective exchanges, or mined at home. Mining at home is a complex process, involving the use of computer algorithms, and there are special devices built exclusively for it now.

    Nitin
    Nitin Puri
    • so

      It stands apart and that is a real threat to places like the federal reserve.
      slickjim
  • Can't believe

    Really? Can't believe, just said to support, how do I bitcoins? Where to sell safely?
    lake222
    • BTC exchange

      Last week I traded in the http://lakebtc.com the two bitcoins, this week has been mentioned now, you can go try it.
      titulng