Indian Bitcoin operators resume services, with caution

Indian Bitcoin operators resume services, with caution

Summary: Following weeks of uncertainty over the fate of Bitcoin in India, operators of the digital currency are now gradually resuming their operations and marketing their services.

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Following weeks of uncertainty over the fate of Bitcoin in India, operators of the digital currency are now gradually resuming their operations and marketing their services. 

The country's largest Bitcoin trading platform had suspended its operations after the central bank issued a public advisory highlighting the risks of virtual currencies, such as money laundering and terrorist funding. BuySellBitCo.in, which handles Bitcoin transactions worth 12 million rupees (US$195,898) monthly, shut down its services prompting others including INRBTC to follow suit.

According to a report in Times of India, tax authorities and the Enforcement Directorate also took action against Bitcoin operators, resulting in other operators halting their services. Many of these, however, are now asking for the government to outline a regulatory framework detailing how digital currencies should be handled in the country. 

Some operators such as Unocoin have since resumed their services on a "trial basis...[with] strict buying and selling limits", and new market players including trading platform BitQuick.in have also sprouted, according to the report. There are some 30,000 Bitcoins in India, accounting for about 1 percent of the world's 12 million. 

Exchanges in China have also come up with ways to stay in business after the People's Bank of China outlawed Bitcoin transactions among local banks and financial institutions, forbidding all third-party payment provides from handling the virtual currency. The Chinese central bank had similar concerns related to the risks of money laundering, its lack of legal status, and association with illegal activities. 

Bitcoin, however, enjoyed a breather in Singapore where the Inland Revenue Authority of Singapore last week outlined tax requirements for transactions involving the currency. Under its advisory, Singaporean businesses that offer the buying and selling of the virtual currency will be subject to taxation on the gains made on the sale. However, if the Bitcoins form part of the business' investment portfolio, the tax authority considers the gains from any sale to be capital in nature and not subject to taxation.

Topics: Banking, E-Commerce, India

About

Eileen Yu began covering the IT industry when Asynchronous Transfer Mode was still hip and e-commerce was the new buzzword. Currently based in Singapore, she has over 16 years of industry experience with various publications including ZDNet, IDG, and Singapore Press Holdings.

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