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Bitcoin operators cautiously resume India operations

The RBI last month had issued a warning against dealing in bitcoin and other virtual currencies due to various risks.

Mumbai |
Updated: January 16, 2014 3:46:38 am

After suspending their operations for a few weeks amid growing regulatory glare, many bitcoin operators have cautiously resumed courting business from their clients and some new players have also come to fore in India.

The Reserve Bank last month had issued a warning against dealing in bitcoin and other virtual currencies due to various risks, including those related to money-laundering and cyber security, as such digital currencies are not backed by any assets or monetary authorities. Besides, tax authorities and the enforcement directorate have also initiated action against some bitcoin operators in recent weeks, which resulted in many entities suspending their operations.

However, many bitcoin operators and even some corporate houses have recently stepped up their lobbying for a clear regulatory framework on digital currencies in India.
In the meantime, some operators like Unicoin have resumed operations, although on a ‘trial basis’, while some new entities have also started dealing in bitcoins. “Unicoin is running on trial basis. Strict buying and selling limits are applied on all accounts,” it said in a message displayed prominently on its website. Unicoin says it will be collecting 0.5 per cent of trade value from customers on every bitcoin buy and sell operations.

Unicoin will also contribute one per cent of trade value to Bitcoins Alliance India (BAI), a new grouping formed by bitcoin operators in India, to further their cause. A new entrant, BitQuick.in has come to the scene, claiming to help connect Bitcoin buyers and sellers in India directly to their own banks. This new player is offering to provide a platform for sale and purchase of bitcoins in India while linking the payments to the customers’ bank account. It is charging 1 per cent fee for purchases of bitcoin, while no charge is levied on those selling these currencies. Large operators like buysellbitco.in and inrbtc.com continue to remain suspended for want of a clearer framework.  However, experts say that market demand for trading in bitcoins and 75 other such currencies in circulation has not diminished much.

Many enthusiasts had bought such currencies eyeing quick gains but are now looking to offload them as the regulatory and legal environment has turned negative.

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