Bitcoin in India has been at the receiving end of a mixed response. The country’s central bank — Reserve Bank of India has grown to like the digital currency, whereas the intelligence agencies in the country are becoming more and more concerned about its potential illegal uses.
The Bitcoin community in the country is rejoicing, following some of the latest developments in the sector. As more people do their Diwali shopping with gift cards bought using Bitcoin, the intelligence agencies in the country have issued a warning about the potential use of digital currency to fund illegal activities in the country. They also expect hawala transactions to switch from fiat to Bitcoin for money laundering.
With the intelligence community raising its concerns about the use of Bitcoin in the country, the Government of India has assured that it will be looking into the potential implications of Bitcoin and other digital currencies on national security and domestic law and order.
A leading Indian news outlet quoted a government official’s response saying,
“At present, we have no mechanism to deal with such mediums. The expertise from RBI will be used to come with specific measures to tackle such issues.”
The government will be working alongside Reserve Bank of India to come up with adequate safeguards to prevent the use of digital currencies for illegal activities. Officials have indicated that they have no plans to ban Bitcoin any time soon in the near future. But the idea is to implement enough checks and balances in the system so that the criminals don’t misuse Bitcoin and other digital currencies.
Bitcoin platforms in India have been working proactively with government bodies to ensure compliance with existing rules and regulations. Even though there are no set regulations governing Bitcoin and Bitcoin exchanges, the platforms are self-regulating by implementing AML and KYC compliance similar to that of banking and financial institutions.
As the digital currency revolution catches up with rest of the world, the Reserve Bank of India is expected to keep up with the changing economic and monetary landscape. The government-industry participation in this regard will make much easier for both parties to find a common ground without compromising the cryptocurrency ecosystem of the national economy.
Ref: Economic Times | Image: NewsBTC