India’s first Bitcoin exchange launched this morning. BTCxIndia, whose first live market ticker began at 11:00 Indian Standard Time, offers “a secure, real time trading platform, following KYC- and AML-guidelines, and allowing instant INR deposits and withdrawals.”
The site allows customers to buy and sell bitcoins for Indian Rupees (INR) “with a tight spread,” as well as instant INR withdrawals and deposits. The site also emphasizes that the level of log-in and security matches those of established financial institutions and that deposits are stored off-line so that no deposits will be lost in case their systems are compromised.
The move may come as a surprise to some following the Bitcoin situation in India. Like many other countries at this point in Bitcoin history, India is having its up’s and down’s when it comes to government regulations.
Last December Reserve Bank of India (RBI) issued a statement to the general public warning to users, holders, and traders of digital currencies of the potential financial, personal, and security risks of dealing in cryptocurrency. The warning slowed the momentum of Bitcoin in India as many merchants temporarily or indefinitely suspended their operations immediately after hearing the advisory.
At the same time, the definition of bitcoin didn’t change in the eyes of the government. KC Chakrabaty, deputy governor of the RBI stated in December 2013 that “at present what we are saying is neither we regulate [Bitcoin] nor we support them.” He added “Regulation comes only when people are doing certain business and we come to understand that something wrong is happening. First of all we don't understand this subject.” The warning remained as no regulations were pursued.
Despite the heightened suspicion by the RBI, Highkart, the first e-commerce site in India began to accept bitcoin as their only form of payment. The site, which currently has a little over 200 items in stock, embraced bitcoin because it was the safest and most reliable payment system for its customers.
Highkart also wated to bring Bitcoin awareness to the masses with its exclusive payment systems. A blog post on the company’s site explained how most Indians with bitcoin hoard the currency and have few chances to spend it:
“At HighKart We wanted to bring Bitcoin into mainstream, rather than keep it as a closed loop currency within the Bitcoin Community. We wanted to introduce Bitcoin to the common mass and help them onboard on HighKart as well."
The blog continued
“For people who own Bitcoins, it has become more of a saving rather than them putting them into some use, as in India; there was no other option till date. We wanted people to use Bitcoin in their day to day lives, thus helping them to be less dependent on the fiat currency which is fast depreciating!”
Even as early as February 2014, the RBI didn’t rule out Bitcoin’s future in the country, yet didn’t completely endorse it. Raghuram Rajan, the RBI’s new deputy director, said of crypto currency:
“I don’t want to say that there is no future for these virtual currencies. I think it’s a process of evolution, but for now all we’ve done is express the kinds of concerns we have about it, without determining in any which way what we intend to do.”
And now, as BTCxIndia arrives among the cloud of uncertainty by the government, reaffirms its stance to keep its customers in the light. An issue on the site reads:
“India’s Central Bank; the Reserve Bank of India (RBI), is said to be “watching” Bitcoin and gathering information in an attempt to understand it better, but has said that it is not interested in regulating it at present.
Until further clarification from regulatory bodies, BTCXINDIA has therefore framed its own Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) procedures, based on existing framework for regulated financial institutions.”
The journey for BTCxIndia has just begun. Whether it has any influence on any future regulations of Bitcoin for now might be too much to speculate. Let’s let them enjoy their first day.