After suspending their operations for a few weeks amid growing regulatory glare, many bitcoin operators have cautiously resumed courting business from their clients and some new players have also come to fore in India.
The Reserve Bank last month had issued a warning against dealing in bitcoin and other virtual currencies due to various risks, including those related to money-laundering and cyber security, as such digital currencies are not backed by any assets or monetary authorities.
Besides, tax authorities and the Enforcement Directorate have also initiated action against some bitcoin operators in recent weeks, which resulted in many entities suspending their operations.
However, many bitcoin operators and even some corporate houses have recently stepped up their lobbying for a clear regulatory framework on digital currencies in India.
In the meantime, some operators like Unocin have resumed operations, although on a ‘trial basis’, while some new entities have also started dealing in bitcoins.
“Unocoin is running on trial basis. Strict buying and selling limits are applied on all accounts,” it said in a message displayed prominently on its website.
Unocoin says it will be collecting 0.5 per cent of trade value from customers on every bitcoin buy and sell operations.
Unocoin will also contribute one per cent of trade value to Bitcoins Alliance India (BAI), a new grouping formed by bitcoin operators in India, to further their cause.
A new entrant, BitQuick.in has come to the scene, claiming to help connect Bitcoin buyers and sellers in India directly to their own banks.
This new player is offering to provide a platform for sale and purchase of bitcoins in India while linking the payments to the customers’ bank account. It is charging one per cent fee for purchases of bitcoin, while no charge is levied on those selling these currencies.
Large operators like buysellbitco.in and inrbtc.com continue to remain suspended for want of a clearer framework.
However, experts say that market demand for trading in bitcoins and 75 other such currencies in circulation has not diminished much.
Many enthusiasts had bought such currencies eyeing quick gains but are now looking to offload them as the regulatory and legal environment has turned negative.
There are an estimated 30,000 bitcoin holders in the country, currently in possession of 1 per cent of around 12 million bitcoins in global circulation.
Some existing operators are in fact shutting down their portals and considering running new services with new names.
Rbitco.in portal is being discontinued from January 31, 2014 but it’s promoters from next month will be continuing the service with a fresh data and a new site.
It has also come to light in the past few weeks that some large corporates are advocating before regulators and policy makers that the world of banking and financial transactions may eventually move beyond the current brick-and-mortar model to the digital world.
Their representatives are believed to be putting across their views through meetings with top officials at the concerned regulatory authorities and government departments, while also suggesting a proper legal and regulatory framework for operations relating to digital currencies, an official said.
Bitcoin, the biggest among all virtual currencies, can be generated through complex computer software systems with solutions shared on a network, although the process is complex and such ‘mining’ can be done only on very powerful servers.
Within four years of coming into existence, bitcoin has become the world’s most expensive currency and its per unit value soared past $ 1,200 level or about Rs 63,000 in November 2013. After slipping below Rs 50,000 level recently, the prices have again moved back to near Rs 60,000 a unit.
There are already close to 75 virtual currencies available across the world with total market valuation of about $ 15 billion (about Rs 90,000 crore), out of which Bitcoin is the biggest with over $ 11 billion value. There are also plans to launch Laxmicoin, the desi version of bitcoin.