Survey: 97% of Indian Traders Are Aware of Bitcoin, but Use Remains Low

A new survey has been released by India’s market and trade body that shows while 97 percent of Indian traders are aware of bitcoin, it’s use among them remains low.

At a meeting called ‘Roundtable on Industry Perspective on Bitcoins: A New World of Payments and Deals,’ the PHD Chamber of Commerce and Industry, which overseas India’s industrial development, asked over 200 participants from a range of industries if they were aware of the digital currency. These included traders from electronic devices, fabrics and automobile parts industries. The objective was to see what impact bitcoin was having on companies within India.

According to the findings, though, while 97 percent of Indian traders are aware of the digital currency, its use within their services remains low.

In a report from News 18, Gopal Jiwarajka, President of the PHD Chamber of Commerce and Industry, said:

“Absence of the information about counterparties in the bitcoins transaction is a major drawback and may lead to unintentional transactions such as money laundering.”

He added that the use of bitcoin brings with it huge risks and that it is only the demand for it that is seeing increased optimism.

Bitcoin Gains Popularity in India

News of this will no doubt surprise many. Only recently a professor of finance at New York University said that digital currencies such as bitcoin were replacing gold among the younger generation in India.

Aswath Damodaran, who is known as the ‘dean of valuation,’ said that when people no longer trusted paper currencies they typically turned to gold, but now:

“Cryptocurrencies have taken the role of gold at least for younger investors because they don’t trust paper currencies.”

With many of India’s nation losing confidence in its currency a rising number of the country’s citizens have been turning their attention to bitcoin. This is particularly the case among the 18-35 age group.

This may be down to the fact that last November India’s prime minister Narendra Modi removed 86 percent of the nation’s currency overnight. With many of the population left in the lurch a significant rise in bitcoin trading was experienced.

Bitcoin Regulation in India?

At the moment the discussion of regulating bitcoin in the country is undergoing.

In the past there have been calls from Indian politicians to declare bitcoin illegal. According to Kirit Somaiya, a member of the Indian Parliament who belongs to the Bharatiya Janata Party (BJP), a right-wing party in India, he has considers bitcoin as a pyramid-ponzi scheme and has termed it as such in the past.

However, it’s unlikely that the digital currency will be declared illegal in the country after the Indian government set up an interdisciplinary committee to look into the risks associated with bitcoin.

Of course, one of the issues with the digital currencies regulatory regime, is who will oversee it.

According to an official:

“Discussions till now suggest that bitcoin will most likely fall under the ambit of the RBI [Reserve Bank of India]. But some are of the opinion that bitcoin is a security rather than a currency and should be regulated by SEBI [Securities and Exchanges Board of India].”

Only recently it was reported that the Indian government was considering putting a ‘goods-and-services tax‘ on bitcoin purchases in light of the regulatory discussion.

India certainly has a wide reaching market that can benefit from the use of digital currencies, particularly considering that India has one of the fastest growing smartphone markets in the world. It, therefore, remains to be seen what the government will decide who will oversee its regulation.

Yet, with a young market that can help boost the adoption of the digital currency, it may be surprising to many to learn that its use still remains low within many industries.

Japan Embraces Bitcoin

Unlike India, Japan has taken the step of legalising the digital currency so that it can be used as a form of payment for goods and services. So much so, that by the end of 2017, it’s expected that there will be 300,000 stores accepting the currency as a form of payment.

Low-cost Japanese airline Peach Aviation Ltd., announced earlier this year that it would start accepting the digital currency as a form of payment for flight purchases.

According to the CEO of the company, it is hoped that by accepting bitcoin for flights it will attract tourists to the country after a rapid growth of the currency in Japan.

Shinichi Inoue said:

“We want to encourage visitors from overseas and the revitalization of Japan’s regions. This is a real first step in partnerships for Japan and we are aiming for more company and service tie-ups.”

Such a move has helped push the country and the cryptocurrency forward as its real world value becomes more prevalent.

Even though India doesn’t appear likely to term it as a currency like Japan has, it still marks a significant step forward for the country. It also highlights India’s interest in pushing for a digital economy, which finance minister Arun Jaitley has been pushing for since the country’s demonetisation last November.

Keeping Tabs on Bitcoin

With rising interest in the digital currency being witnessed in India, officials are keen to ensure that the public aren’t taken advantage of from companies that deal with bitcoin.

So much so, that the Ministry of Corporate Affairs (MCA) informed the Serious Fraud Investigation Office (SFIO), regional directors and the Registrar of Companies to collect information on the firms that are involved in bitcoin.

The instructions sent were issued to see:

“[I]f the investors/ depositors/ public or stakeholders are being prejudicially affected and/ or such companies are using this mode of investment to lure the gullible public in collecting funds.”

It’s hoped that by doing so they can keep on top of any potential risks they may need to take care of. Bitcoin may not be banned in India, but the fact that it’s not regulated can pose a risk to people who don’t fully understand what it is.

It remains to be seen whether more traders will start using the digital currency in their services once it has been regulated.

Featured image from Shutterstock.

Russia Considers Regulating Bitcoin, but Doesn’t Class it As A Currency

As Russia’s Central Bank explores the ways in which it can regulate the digital currency Bitcoin, the bank’s governor has raised questions as to whether it can be classed as a currency.

In a recent interview with CNBC, Elvira Nabiullina, governor of the Russian Central Bank, stated that she views Bitcoin as a digital asset instead of a currency.

She said:

“We don’t consider that Bitcoin can be considered as a virtual currency. It’s more digital assets with the regulation of assets.”

However, the fact that the bank is even considering the regulation of Bitcoin is a marked difference from the country’s previous stance regarding the cryptocurrency.

In March 2016, a new amendment to the Criminal Code by the Ministry of Finance in Russia saw the regulator proposing a seven-year prison sentence for management and executives of banks and financial services firms for the use of Bitcoin. For everyday individuals caught using the digital currency, the proposed prison sentence was deemed less at four years.

However, despite the proposed new draft law, the following month saw the proposal by the Finance Ministry hit a delay. At the time, the deputy finance minister Alexei Moiseev stated that a number of corrections to the proposal were the cause of the holdup.

Now, though, in a turnaround of events, the central bank’s governor has revealed that the authority is ‘analyzing’ the possibility of regulating the digital currency and is looking at the internalisation of the digital currency into the country’s regulatory systems. While Nabiullina didn’t extend further on what the central bank was doing, she did add that the authority had some concerns about Bitcoin.

“We have some doubts, we don’t see some huge benefits from introducing digital assets in our economy.”

Yet, while the Russian Central Bank is weighing the pros and cons of Bitcoin as it works on the ways it can regulate it, there are some Russian companies that are due to embrace the currency as a form of payment.

Ulmart, which is the Russian version of Amazon, revealed in May that it was going to start accepting Bitcoin alongside the fiat ruble in September 2017. It was due to accept the digital currency earlier in February; however, the e-commerce giant experienced a setback after the central bank intervened, blocking the company from accepting Bitcoin.

In the PR, Brian Kean, Chief International Officer of Ulmart, said:

“Ulmart believes such initiatives as bitcoin can be part of the efforts to develop ‘smart’ economy and cities and will aim to play a major role in this process.”

Bitcoin’s Price Surge

The price of Bitcoin has grown exponentially during the first half of 2017. In May, the price of the currency jumped to a near $2,800 for the first time, after it recorded a price of $2,799.

However, while the price bubble finally burst at the end of May, pushing the currency’s value down to $2,300 and wiping around $4 billion of its market cap value, there is still a bullish attitude within the community. So much so, that several predictions have already come out indicating a positive future for the digital currency.

Last December, a Saxo Bank analyst predicted that the price of Bitcoin could reach $2,000 by 2017, which came true on the 21 May, 2017. That same analyst, Kay Van Petersen, has now predicted that the cryptocurrency could attain even greater heights and believes that in 10 years time, each Bitcoin could be worth around $100,000.

Not bad considering that Bitcoin was trading around $750 toward the end of 2016. Van Petersen, however, is not the only way to see a bright future for the digital currency.

Aurelien Menant, CEO of regulated digital currency exchange Gatecoin, has said:

“I would not be surprised to see the Bitcoin price doubling again to around $6,000 by the end of the year.”

While, Bobby Lee, CEO of BTCC, a major digital currency exchange has tweeted in the past, stating that the cryptocurrency could reach between $5,000-$11,000 by 2020 after the block halving reward.

Additionally, CNBC Daniel Masters, director of Global Advisors Bitcoin Investment Fund (GABI) has spoken out and said that the long-term investment in Bitcoin remains strong and that it has the potential to reach $4,000 within eight to 14 months.

These are just a few of the positive indications of where Bitcoin can go, which is seeing heightened interest in the currency around the world.

Japan Legalises Bitcoin

A boost in the price and value of Bitcoin can be attributed to the fact that in April the Japanese government made changes to its regulations, which now recognises Bitcoin as a form of payment. As a result, significant trading volumes are coming from Japan.

With Japanese companies now open to accepting the digital currency as a form of payment, companies such as Peach Aviation Ltd., will make it possible for customers to pay for their flights with the currency by the end of 2017. Peach, however, is just one of thousands of industries that are already, or are due to, accept the currency in light of the new law changes.

Russia’s Next Move?

It’s not yet clear as to where Russia is going with its proposed Bitcoin regulation. In a report from Bloomberg in April, Moiseev, said that in 2018 Russia could recognise digital currencies such as Bitcoin as the authorities work on enforcing rules against money laundering.

He said:

“The state needs to know who at every moment of time stands on both sides of the financial chain. If there’s a transaction, the people who facilitate it should understand from whom they bought and to whom they were selling, just like with bank operations.”

Even though Bitcoin isn’t regulated by any government, its use by criminals has meant that it is being scrutinised by many governments who believe it’s being used for money laundering purposes, which is hard for the authorities to track.

The recent WannaCry cyberattack, which targeted thousands of computers in hundreds of countries, further highlighted its use within the criminal world. Russia was one country targeted and is reported to have been the worst hit in what has become known as the most audacious global cyberattack to have taken place.

Naturally, it is because of this incidents that countries are keen to track Bitcoin payments to stem the flow of ill-gotten gains.

Such a move to regulate the currency in Russia may also play a role in pushing its price even higher.

As of 5 June, the price of Bitcoin is trading around $2,590.

Featured image from Flickr via Joseph Pole.

New York’s Bitlicense Rules Officially Released

New York has been looking into regulating the usage of Bitcoins for companies for a long time and while rumours have been circulating in regards to what exactly the Bitlicense rules would include, nothing has been made official – Until today that is.

Because today the official rules for the Bitlicense were released, which means that companies who wants to use the cryptocurrency now have an official guideline with rules to follow if they wish to operate in New York.

What’s interesting about the Bitlicense is that it might be the first step towards complete regulation in the US, with many other states expression interest in the Bitlicense. Ben Lawsky, Head of New York’s Department of Financial Services (DFS) officially released the rules and answered a few of the press’ questions.

The new regulations has a whopping 44 pages of rules, laws and guidelines on how to operate with Bitcoins in New York, which you can read more about here. 

The DFS has regulatory oversight over many companies, including banks and insurance companies. Amongst the companies regulated under them are Goldman Sachs and Barclays, proving that they are serious about the Bitlicense.

All companies who wants to operate in New York and use Bitcoins needs to obtain a Bitlicense, which costs $5,000, a mere cost for most companies. The fee is not refundable and the license can be revoked if a company breaches any of the rules stated in the Bitlicense agreement.

“No person shall, without a license obtained from the superintendent as provided in this part, engage in any virtual currency business activity.” The document states, making it clear that you cannot operate with cryptocurrencies in New York without a license.

But despite the low cost for a Bitlicense, it still won’t be easy for small startup’s and medium sized companies to obtain the license, as the agreement also states that every company needs a compliance officer. The compliance officer will be in charge of ensuring that the company follows all state and federal laws in regards to money transmission and money laundering.

This has led to some concerns from people who believes that the Bitcoin should be usable for all companies, not just the big ones who already makes a ton of money in the fiat-money industry. They fear that the Bitcoin industry will be taken over by the larger corporations and leave the small companies, who can use the Bitcoin the most, out in the dark.

“Getting that balance right is hard, but it is key. We want to promote and support companies that use new, emerging technologies to build better financial companies. We just need to make sure that we put appropriate regulatory guardrails in place,” Lawsky said to the press in a speech he held at the BITS Emerging Payments Forum in Washington DC.

While the regulations seems to not be ideal, it is at least a step in the right direction to boost the Bitcoin usage in the US and make the mainstream consumer more aware of the fiat-money alternative.

Australia Decides Not to Regulate Bitcoins and Other Cryptocurrencies

It’s interesting times in the Bitcoin world these days. While more and more countries has decided to go in and officially regulate the Bitcoin and other cryptocurrencies, Australia has gone in the exact other direction and decided officially that they will not be regulating it.

The news broke on April 7th, when the Reserve Bank of Australia (RSA) released a press release where they stated that they are not in favor of regulating Bitcoins or any other cryptocurrency. Basically they do not see it as a threat to the Australian market and believes that it would be a waste of ressources to regulate it.

“Given the very limited use and acceptance of digital currencies in Australia, digital currencies do not currently raise any issues for the bank in terms of the bank’s monetary policy and financial stability mandates,” Tony Richards, Head of Payment Policies at the Reserve Bank of Australia said in an announcement.

Basically this means that they do not see any problems in two parties deciding between each other to settle outstanding payments in Bitcoins or in another cryptocurrency, should they wish to do so.

At the same time however, the RSA announced that they do see a need to find a way to cooperate between countries when international Bitcoin transactions are being made, to ensure that there is no money-laundering being done, that the taxes are being paid as well as protect any consumer paying with Bitcoins.

The RSA will still continue to monitor the Bitcoin and how it evolves in Australia, in order to be able to regulate it on a later point, should it be found necessary to do so. They noted that Bitcoin exchange collapses such as Mt Gox should not be able to happen if the correct regulatory framework is in place and that consumers in such cases needs to be protected more.

So what does this mean for Australians who wishes to use the Bitcoin? Basically it means that they still need to follow the standard taxation laws of Australia in regards to commodities, but that everyone is free to own and use as many Bitcoins as they wish to do without any legal interference from them.

This paths the way for Australians and Australian companies to use the Bitcoins as they wish, either to shop online, gamble or even do smaller money transfers at the low cost that the Bitcoin offers.

While the Australians are not that adaptive of Bitcoins yet, it may just be the boost that it needs to take the next step. With companies now knowing that they can legally accept Bitcoins without troubles and for consumers to know that they can spend them likewise, the adaption in the country should increase significantly over the years.

There’s still a small issue with Australian banks not being found of Bitcoin transactions made in consumer and business accounts, but hopefully that will change now that the RSA has made a public statement that they see no need to regulate it.