With India’s first bitcoin exchange gearing up to start operations hopefully by next March, hundreds of investors, enthusiasts and banking officials gathered here on Sunday, on a mission to convince the government that the virtual currency is enduring and serious.
Started in 2008, bitcoin is the most prominent amongst a group of digital currencies — money that exists in the form of computer code —that do not have a central issuing authority. These virtual currencies are stored in electronic wallets and can be traded on online exchanges and converted into cash.
At India’s first bitcoin conference — organised by digital currency awareness organisation CoinMonk— the top issue was how to convince the government and regulators that the bitcoin ecosystem would be a valuable economic innovation and not the currency of choice for money laundering and illegal drug purchases.
Several Indian companies, whether they are online exchanges, trading platforms or bitcoin ‘mining start-ups,’ have already started hiring lawyers and lobbyists to make their case to various government agencies and to demonstrate to potential banking partners that they take regulators seriously.
“In India, bitcoin can help solve the problems of the unbanked rural population. It is also a potential remittance tool. We are working with lawyers to draft possible policies that we could present to the RBI and other government agencies by next month,” said Sunny Ray, Director of Business Development at Buttercoin, a free bitcoin exchange that is backed by investors including Google Ventures.
Buttercoin hopes to tentatively start its India operations by next March, which would make it the first domestic exchange.
The Reserve Bank of India, which has so far maintained silence apart from issuing a statement that it is adopting a ‘wait and watch’ stance on bitcoin, had a few observers at the conference. They, however, refused to speak to the media.
For the team that is developing India’s very own digital currency, dubbed ‘laxmicoin,’ the RBI has been unresponsive.
“We need a local digital currency to help local businesses. That’s how laxmicoin started. We sent them [RBI] queries and proposals awhile ago and are waiting to hear from them in order to start the launch of laxmicoin,” said Deepak Mantwal, a founding member of the Jaipur-based Laxmicoin team.
For many others, the Bangalore conference was a step forward in the eventual creation of a bitcoin trade group or association that could protect the rights of users and entrepreneurs.
“We don’t want banks or the government to shut down exchanges and other companies that thrive on the bitcoin system just because it’s scary. Close to Rs. 1.20 crore worth of bitcoin transactions are done from India every month. We need to figure out a way we can all exist,” said Karthik Jeyraj, a bitcoin enthusiast and researcher.