Indian Regulators worried about Money laundering use of Bitcoin

The Indian regulator appear to be concerned with the growing attention of Bitcoin. The increase in the exchange value of the currency to around US$ 1200 appear to be creating panic amongst the regulators without considering the real impact on the economy.

It is stated that the total Indian currency in circulation is around 9.7 lakh crores worth. The global Bitcoin population is now estimated to be around 10% of this. Of this, Indian holding is negligible. Even after the hypeabout Bitcoin surfaced, during the last week of November the total downloads of Bitcoin mining software in India was about 0.8 % of the global downloads and about 2.5% of of the downloads from China. The fake currency in India itself is estiamted to be around Rs 6000 crores, several times higher than the possible Bitcoin holding. Hence the real impact is not worth fearing at this point of time.

RBI is looking at the possibility of Bitcoin being used by criminals. This is a possibility as much as the use of fake currency and the black money hoarding in Swiss Banks.

SEBI is also reported to be looking at the Business Objectives in the memorandum of association filed by companies working in this domain as perhaps exchange houses.

It would be interesting to observe how the regulators are likely to respond. Before the proposed global conference we may see a media frenzy which may further muddy the waters.

This Business Standard Article is perhaps the beginning of the media onslaught.


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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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