The Reserve Bank of India has once again indicated its desire to regulate all activities related to Bitcoin and other virtual currencies in the country. Given the decentralized nature of these currencies, with no “backing” in place, the Reserve Bank of India fears virtual currencies will put the country’s financial ecosystem on its head. While this may be what Bitcoin was set out to do, strong opposition from government officials could present quite the roadblock.
Bitcoin And Virtual Currency Might “Pose Concerns”
It is no secret that Bitcoin, as well as other popular virtual currencies, can provide a perfect way to circumvent a country’s capital controls. Additionally, Bitcoin would facilitate the transfer of fiat currency in and out of India, regardless of whether it would be the local currency or any other type of currency.
After an earlier statement by Reserve Bank of India Governor Raghuram Rajan, the Deputy Governor SS Mundra has once again called out for Bitcoin regulation in the country. The main purpose is to monitor all virtual currency activity taking place, to ensure there are no “concerns” regarding Bitcoin and other currencies.
“It is near impossible to regulate the behavior and choices of individuals…hence, it will be more practical for the regulatory authorities to push for bringing in appropriate regulatory changes in their jurisdiction which would enable regulation of the aggregators’ electronic dealing platform,“ – SS Mundra told the media.
Unlike the stance taken by new York state officials – in the form of BitLicense – the Reserve Bank of India is taking a more cautious approach to regulating virtual currency. Rather than cracking down on how finances associated with virtual currencies are raised, the true issue regarding orderly growth of the system seems to be the main concern.
Additionally, consumer protection will play a pivotal role in the popularity growth of virtual currencies around the world. Even though Bitcoin transactions reduce the risk of fraud and offer no chargebacks, stolen funds can not be retrieved either, which is a constant worry. Plus, virtual currencies will have an impact on local businesses, which is another concern that needs to be addressed sooner rather than later.
Not Interfering, Just Observing
The main thing to remember is that the Reserve Bank of India does not wish to interfere with the virtual currency ecosystem, but rather monitor things closely to gain a better understanding. The way things stand right now, there is little activity going on in India regarding virtual currency usage, even though there is a noticeable uptrend.
Virtual currencies such as Bitcoin offer a ton of “grey areas”, which are not legal nor illegal to “exploit”. Addressing these grey areas around the world would give Bitcoin a more legitimate allure, which can only be beneficial to making mainstream consumers aware of the benefits offered by virtual currencies.
Source: News Tip Via Email
Images courtesy of Reserve Bank of India, Shutterstock