The decentralized virtual currency that took the planet by storm has witnessed a 300 percent rise in value in only one year. Its value hit an all-time high when Japan passed a law to simply accept bitcoin as a legal payment method.
Despite RBI’s reluctance to acknowledge the cryptocurrency, the interest in Bitcoins in India has not waned. After Prime Minister Narendra Modi’s demonetization move, Ahmedabad-based bitcoin trading start-up Zebpay witnessed a 25 percent surge in revenue.
Unocoin, another bitcoin trading firm that had received funds from Blume Ventures, saw a threefold rise in its user base to 1,20,000 following demonetization.
Value of Bitcoins might not come down as there is a limited number of Bitcoins and every day more and more people are showing interest in investing within the cryptocurrency.
Is Bitcoins legal in India?
Even as economies like Japan and Russia move to legalize the utilization of Bitcoins, India, despite being at the cusp of a digital revolution is yet to officially recognize the cryptocurrency.
India’s financial institution, the Federal Reserve Bank of India or the RBI, which regulates Indian rupee, had earlier cautioned users, holders and traders of Virtual currencies (VCs), including Bitcoins.
“The creation, trading, or usage of VCs including Bitcoins, as a medium for payment aren’t authorized by any financial institution or monetary authority. No regulatory approvals, registration, or authorization is stated to possess been obtained by the entities concerned for carrying on such activities,” the financial institution had said.
In March, RBI Deputy Governor R Gandhi warned against cryptocurrencies like Bitcoin. “They pose potential financial, legal, customer protection and security-related risks,” Gandhi said. “Payments by such currencies are on a peer-to-peer basis and there’s no established framework for recourse to customer problems, disputes, etc. status is certainly not there,” he added.
However, the financial institution hasn’t unequivocally banned Bitcoins within the country.
Blockchain, the technology behind Bitcoin
Although Bitcoin is yet to become mainstream in India, the underlying technology behind it, the blockchain technology has caught the eye of several Indian banks. Last year, ICICI Bank announced that it successfully executed transactions in international trade finance and remittances using blockchain technology
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