While Bitcoin has been legalized in Japan as an official currency, it has found some opposition in other places. Could that soon be changing?
Welcome to India!
The land of over 1.3 Billion people.
Bitcoin has seen a massive surge in demand in India, however, it hasn't been recognized as an official currency just yet. Instead it is classified as an asset, similar to gold.
However, as more and more countries are jumping on board the Bitcoin bandwagon, the Indian Government is being forced to re-examine how they look at Bitcoin.
Will that change anything?
In April of this year a committee was formed to examine the existing frameworks around Bitcoin and other virtual currencies both locally and worldwide.
The goal of this committee will be to examine and monitor the current virtual currency statuses in other countries and also discuss how they can combat money laundering and make sure the consumers of these products are protected.
The expectation is that the committee will make it's recommendations to the government by the end of July.
To further expand on how serious India's government is taking Bitcoin (and virtual currencies)...
Along with creating that committee, they also recently opened up the topic for public opinion in order to get some added input.
The public chimed in with more than 3,800 comments on the matter.
According to reports from the area, it is looking highly unlikely that there will be an outright ban on Bitcoin as was once a possibility. That seems to be sounding an awful lot like the stance Russia once took as well.
At one time Russia was contemplating outlawing Bitcoin and jailing anyone trading it. Now, they are talking about legalizing it as an official currency.
The Times, They Are A-Changin!
<div style="position:relative;height:0;padding-bottom:56.25%"><iframe src="
(I love to squeeze this song in any time I can)
The co-founder of India's leading Bitcoin exchange (Zebpay), Sandeep Goenka had this to say regarding Bitcoin legalization:
"We are cautious but optimistic that the government recognizes the need to regulate bitcoins and virtual currencies. We recognize that it's a challenging task for any government. We look forward to engaging with the task force setup to give our recommendations."
To date, Bitcoin hasn't received much acceptance from Indian officials thus far. The Reserve Bank of India had this to say back in 2013 regarding virtual currencies:
"The use of online and mobile technologies are driving the proliferation of virtual banks, virtual currencies, and provision of banking and payment services by unlicensed entities. While leveraging on technology has resulted in many benefits, especially in extending the reach of financial services, these developments pose challenges in the form of regulatory, legal, and operational risks."
Not much has changed since that time, except many more people are now transacting and trading them.
Which is basically forcing the government to re-examine it's previous stance.
Currently, the major virtual currency exchanges Zebpay, Unocoin, and Coinsecure operate by following the current Know-Your-Customer and Anti-Money Laundering guidelines. Going forward, it will be very important to make sure that bitcoin transactions are non-cash transactions.
Meaning that every transaction from bitcoin to local currency is done via bank transfers or done using some other transparent mechanism.
This will be an important feature in combating money laundering.
While it looks like India might still be a ways off on outright legalizing Bitcoin as an official currency, it certainly is moving in the right direction.
It is very encouraging to see countries like India and Russia completely change their stance on Bitcoin and virtual currencies that they held just a couple years prior.
Looking forward to see many more following in their footsteps.
Stay informed my friends!
Follow me: @jrcornel