India Latest Country Concerned Over Bitcoin

Trader in the virtual currency Bitcoin are having a bit of a tough time of things of late. India is the latest in a line of countries becoming increasingly concerned with Bitcoin. After some initial momentum that saw numerous Bitcoin exchanges emerge in India, the Reserve Bank of India has issued a warning that sent traders reeling last year.

The RBI’s new governor, Raghuram Rajan, has reiterated the central bank’s aprehension about the reliability of Bitcoin. Rajan said there are ambiguities about who controls the value of Bitcoin, whilst Addressing a technology conference in Mumbai earlier this week.

Addressing a conference organized by Nasscom, he said “As a currency, I do worry a little bit when the underlying (value) fluctuates tremendously. One of the values of a currency is stability and the extent (to which) a currency is target of speculation as opposed to primarily a means of exchange.”

The traders of Bitcoin in India are not throwing in the towel just yet. In fact, only last month, Highkart became the first (and the only) e-commerce site in India to start accepting payment in Bitcoin. Highkart sold a pair of shoes from Provogue in exchange for Bitcoin as its first transaction

The firm’s co-founder Amit Kumar said “one of the challenges facing growth of Bitcoin in India is that many early adopters are still hoarding the currency and not trading them…There’s nothing illegal in accepting Bitcoin, the RBI will take more time to come up with clarity.”  They currently have 150 products and the startup does not charge extra for shipping.  Highkart say they are following all banking systems that are prescribed by the RBI, thereby not allowing room for any illegal activities.

Obviously a main concern for regulators and policymakers about Bitcoin is it could be used for laundering money and other illegal activities. The Bitcoin traders however say that such concerns apply to any currency.  The RBI is not ruling out a future for Bitcoin in India just yet.

“I don’t want to say that there is no future for these virtual currencies, I think it’s a process of evolution, but for now all we’ve done is express the kinds of concerns we have about it, without determining in any which way what we intend to do,” Rajan said.

[Image via: vr-zone]

SOURCE: http://techcrunch.com/2014/02/11/india-raises-concerns-on-bitcoins-credibility-but-doesnt-call-it-illegal-yet/