Reserve Bank of India on Cryptocurrency: “We Shouldn’t Intervene Strongly Until We Understand it Better”

According to recent comments from an official at the Reserve Bank of India at the 2nd annual economic conclave held by the State Bank of India, India may take it slow when it comes to digital currency regulation – at least for now. In recent remarks from Mumbai, Raghuram Rajan, the Reserve Bank of India’s Governor, commented on crowdfunding and cryptocurrencies. With many Bitcoin companies making a pronounced exit from the state of New York as a direct result of the BitLicense, other countries with a wait-and-see policy for tech have started to reiterate their position. Meanwhile, the upcoming California legislation AB1326 could create the next big issue blocking Bitcoin and blockchain innovation within America. The fact that Silicon Valley is within America, and itself home to many of the world’s Bitcoin startups, has brought commentary from the EFF and Coin Center.

India interested in viewing “market intelligence” on cryptocurrencies

Lucky for Mr. Rajan, a plethora of websites are currently online that provide all forms of market intelligence on cryptocurrencies. The ones that focus on providing market intelligence on only the Bitcoin blockchain are numerous, and well known in some instances. Sites like blockchain.info have long since provided information on the Bitcoin blockchain (technically, originally spelled block chain). Anybody with an internet connection can visit these sites and see when the last Bitcoin block was mined, what the last transaction was, where the nodes are currently located, etc. The amount of information available is almost typical of this new, interconnected age. Bitcoin and other cryptocurrencies are the evolution of money into this age.

The readily available data on the blockchain is an inherent part of Bitcoin and other cryptocurrencies. Even in cryptocurrencies that eschew the “psuedonymous” approach that Bitcoin takes in favor of ring signatures and true anonymity, blockchain data is still usable to provide meaningful statistics. Statistics such as daily volume, number of distinct users, health of the overall network, average transaction time, average block size – you name it and it can be found. Again, that’s an important feature of cryptocurrencies, one that makes excessive regulation like the BitLicense onerous and unnecessary. A searchable ledger sounds like a law enforcement dream come true, and frankly it is. Of the infamous dark net markets that have made their way to the public eye and drawn political ire, the forerunners have been caught. Whether or not Silk Road number 1 was taken down legally or illegally is an interesting discussion in and of itself, but the fact that law enforcement agents have been able to use the blockchain for their own purposes is undeniable. In some instances, the purposes of said law enforcement agents “might” have involved setting up Ross Ulbricht, robbing the government and the underground drug market of digital currency, and more; however, we won’t know if the courts will stamp their brand of approval on that version of the story until that trial is over.

Didn’t you hear? It is the “Age of Cryptocurrency”

Cryptocurrency, which the Economic Times of India refers to once as “cryto currency,” is here to stay. As a new technology, the release of Bitcoin and the dawn of the “Age of Cryptocurrency” (a great book by the way), marks a new frontier and new possibilities to do the things that we used to do but better – just like the Internet. If the nearly $1 billion USD in venture capital that has been poured into the digital currency space doesn’t clue you in to this unavoidable fact, then not much else will. The comparisons drawn by tech experts between the early age of the Internet and the early age of digital currency are mostly accurate, even including the corresponding Internet bubble burst of 99′.

It won’t be all roses, but hopefully there won’t be any guns either

There have already been some instances of venture backed Bitcoin companies throwing in the white towel; notably, from India, the remittance-busting international Bitcoin exchange Buttercoin never fully came to fruition despite raising $1.6 million USD. Buttercoin permanently shuttered its doors earlier this year. Banking troubles have also lead BTCxIndia to close its doors after losing its bank account. Even with the unfortunate exit of Buttercoin, a small number of Bitcoin startups targeting the Indian population have arisen.

Indian Bitcoin Startups on the rise

Image from Unocoin

Image from Unocoin

Services that allow Bitcoin users to spend their bitcoins at local merchants are just starting to take off in force. For instance, the startup ePaisa now allows their merchants to accept Bitcoin. ePaisa is notable among the many merchant facing mobile applications because it emphasizes its support of multiple languages, something that is dear to the heart of the international Bitcoin community. Sathvik Vishwanath is the CEO of another such Bitcoin startup, called Unocoin. Vishwanath feels that Bitcoin will still take some time to fully catch on in India. He told the India Times:

We are seeing a monthly traction of 20% as far as bitcoin usage and acceptance is concerned. The US has 100 thousand business outlets that accept bitcoins. To get to that kind of number, India will take at least two-three years.

image from Unocoin

Image from Unocoin

No matter how long it takes, though, the movement has started and it is here to stay. Here at Bitcorati, we recently interviewed another one of Unocoin’s advocates, Sunny Ray. Ray pointed out three factors that will drive Bitcoin’s adoption in India:

I do think that there is a bigger need for digital currencies and decentralization in countries like India. There is a massive population of people who love gold and understand IT. So with bitcoin being digital gold, there is a huge marketplace for bitcoin. Secondly, remittance is a sector that is just waiting to be disrupted. Thirdly, you look at the massive unbanked population in countries like India and bitcoin just seems like an obvious solution.

With the recent words from the Reserve Bank of India, hopefully these companies will be allowed to move forward in peace. More specifically, I hope that Indian banks take these words at face value and allow Bitcoin to be the next bleeding edge of the growing tech wave coming out of India.

What do you think about Bitcoin’s prospects in India? Leave a comment below to continue the discussion!

Featured image from Wikipedia.

About The Author

Profile photo of Caleb Chen

Digital Currency Advocate

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