The Bitcoin craze boost in India
In a move expected to boost financial inclusion, the Department of Economic Affairs in the Ministry of Finance in India has formed an inter-disciplinary committee to examine the framework on virtual currencies. The Indian government now is keen on understanding how Bitcoin works and is willing to deploy resources to build frameworks.
Bitcoin investors and companies welcome these efforts. They feel will it allow them to address concerns over security and risks pertaining to the use of Bitcoin, and eventually work towards improving its infrastructure.
Concerns with Bitcoin infrastructure:
The majority of Indians who participated in the discussion on MyGov forum initiated by the government expressed interest in seeing Bitcoin become a larger part of the financial and trading systems in India, however they worried about its reliability as a currency. There have been reports of bitcoin trading amounting to money-laundering and that it propagates the financing of terrorist outfits.
Hesham Rehman, CEO and cofounder of Bitxoxo, understands the concerns but urges that “there is nothing corrupt about cryptocurrencies—they enable direct transactions with no third-party intervention.”
Bitcoin is also viewed with suspicion because it doesn’t fall under the purview of any government or centralized approach or policy, and its value keeps on fluctuating.
Securing the Bitcoin infrastructure:
To keep their user base growing, India’s Bitcoin companies are keen on proving their platforms are trustworthy. They’re implementing multiple security checks, and all Bitcoin companies seek a valid ID proof from users that include government-verified address documents, a Permanent Account Number (PAN) or an Aadhaar number. Some companies even conduct voice verification and seek bank account details.
Private Bitcoin companies have even formed their own association: the Digital Assets and Blockchain Foundation India (DABFI). The self-regulated entity is working towards educating the masses about cryptocurrencies and propagating best industry practices for businesses.
Boosting investor confidence
Until 2013, Bitcoin wasn’t very popular in India. Now, there’s a fast-growing customer base as well as rising investor confidence.
• Unocoin raised $1.5 million USD, a record for an Indian digital currency outfit, and is paving the way for domestic and international investors to support Indian Bitcoin companies.
• Zebpay raised $1 million USD in 2016, largely from Claris Life Sciences and Jindal Worldwide.
Mostly financial investors are rightfully cautious about investing in this space due to lack of regulatory clarity. But as the government is working with these initiatives to sketch regulatory frameworks that boost innovation as well as ensure safety of the platforms, there should be a boost in investor interest and confidence as well.
Bitcoin’s future in India looks promising .Currently, Bitcoins are used to make purchases through mobile apps and buy gift vouchers. In the future, companies plan to step up the infrastructure that would support remittances to India and provide online financial solutions for the country's unbanked population.
Appreciate your attention.
** Compiled from various sources on the internet.