Barely legal: India Bitcoin market continues to grow despite regulatory confusion

Despite ongoing regulatory confusion among Bitcoin exchanges in South Asia, BitQuick has expanded their trading operations in to India by launching BitQuick.in, an escrow-esque style Bitcoin exchange.

Whether or not BitQuick can completely circumvent current legal spats between the Indian authorities we are not sure. We recently documented the re-opening of the Unocoin exchange here after India’s top taxation expert, ‘Nishith Desai’ gave them the green light to continue trading despite prior raids by the Enforcement directorate. We are not sure if  same legal workarounds which Mr Desai found for Unocoin also make BitQuick legal in India? The regulatory practices behind the scenes may not be inline with the authorities.

The BitQuick exchange portal allows people to purchase Bitcoin using a variety of methods including National Electronic Funds Transfer(NEFT), Real Time Gross Settlement(RTGS), Immediate Payment Service(IPS) and cash deposits.

The exchange carries a 1% fee for buyers (which will increases to 2% from February 2013) and selling is currently free which makes it an attractive exchange for both parties.

Large trades can also be handled with a maximum transaction limit of 500,000 rupees which is around £5,000 or $8,000, more than other exchanges.

We spoke with BitQuick’s exchange operators to find out more.

1. Do you have official approval to launch the exchange from the Indian authorities ?

We do not currently, and given our lack of a physical presence in India, we do not have plans to formally register as a business with Indian authorities. The lack of well-defined virtual currency regulations make it difficult to categorize our role as a physical business in India.

2. What happens if you are raided/banned by the authorities. Are buyers/sellers wallets secure?

Absolutely, the escrow addresses’ private keys are held in encrypted files offline in locations separate from the web servers themselves. A direct ban by Indian authorities would solely result in the cease of operations, and the return of all pending escrow funds.

3. How does the exchange differ from current exchanges such as Unocoin/ buysellbitco.in?

Unocoin and Buysellbitco.in are fixed-rate exchanges. At all times, they have a fixed price and spread they are willing to buy or sell bitcoins for. Our exchange is different in that BitQuick.in does not directly buy or sell any Bitcoins. We simply allow users to list their Bitcoins for sale, and buyers to then make purchases. INR is sent directly from the buyer to the seller, and then the Bitcoins are released from the seller’s escrow address to the buyer once payment is confirmed. In this way, we act more like an escrow service and avoid the regulatory complications involved in handling FIAT currencies.

4. have you taken any legal advice to make sure what Bitquick is doing in India is legal?

Yes, we are always doing our best to stay on top of developing regulations by consulting our legal professionals.

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Argentina could drive the next Bitcoin price explosion

  • We speak to Coin4ce’s operations manager and chief revenue officer at BitPagos.

The current financial situation is extremely worrying for the Argentinian people with the 25-30-percent inflation rate reducing the value of the Peso. This has resulted in an increased daily living cost for millions of people, which in turn is driving up the blackmarket trade in illegal Blue dollars.

The situation has been well documented for over a decade. Investment within in the dollar grew rapidly since the Argentinian government defaulted on the debt in 2001 causing a lack of financial trust in the people.

President Cristina Kirchner has since pushed several hard hitting legal measures to curb the dollar trade, one of which is stopping the exchange of the Peso to Dollar in many of the banks.

She then went on to increase the credit card tax to a whopping 35% on international purchases, which caused a further financial blow to the people.

Due to these clamp downs it has become increasingly hard for traders to keep up with the supply of dollars and avoid inflation. Black Market workers often have to cross the border to Uruguay to withdraw dollars from ATM’s to compete with the ever growing trade.

This has ultimately paved the way for an alternative currency, Bitcoin which is easier, more convenient and sustainable with the added incentive of bypassing inflation risks.

Bitcoin is growing extremely fast in Argentina, Localbitcoins.com ranks the country within the top 10 on their statistics page showing a healthy exchange network already developing in many cities.

Government regulation around the cryptocurrency has yet to be clearly announced, but due to the growth this could well change (very soon).

One company leading the way in Argentina is BitPagos whose main aim is to provide merchants and buyers with easy, cheap and fast electronic payments to Latin America, most notably Argentina.


We spoke to Fernando Paradiso the Chief Revenue Officer of BitPagos:

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What are your thoughts on Argentina adopting Bitcoin?

Argentina is going to be, perhaps, the first country in latin america to adopt bitcoin. But not only because of the dollar spread, but because we’re used to be early adopter in technology terms.

In terms of financials, bitcoin is a safe way to keep savings, make extra revenue because of the currency fluctuation and also stay safe from the inflation.

Are you seeing an increase in businesses using BitPagos to accept bitcoin?

In argentina there are several companies that are adopting bitcoin as a payment methods, most likely hotels, travel agency and tourism oriented companies and services.

The main reason of this behaviour it’s because nowadays bitcoin is being used a financial instrument, a saving method or a way for tourist to move money on a safe way, avoiding controls and so… it’s kind of a new “Amex Traveler’s check”

And at Bitpagos we’re reaching online companies like MMO’s social games and social networks to adopt bitcoin as a payment method, because there are no age restriction, there are no chargebacks, it has instant approval and since the fee is incredible low, this companies make more money out of micropayments.

Do you think the “Central Bank of Argentina” will try to stop people converting Pesos to Bitcoin ?

Bitcoin is way bigger than the Argentinean central bank… therefore, they first need to understand what’s a bitcoin and how other countries behave in terms of this currency.

On top of that, the dollar leak is bigger than you think, but it’s happening through other channels.

And here, bitcoin is considered a digital active, therefore is not illegal to buy them, sell them or save them.

How can people support the growth of Bitcoin in Argentina ?

Well, that’s a good question… truth be told, the current market it’s incredibly small compared to it’s potential…

Every day more stores, bars, restaurants and theatres are accepting bitcoin as a payment method.

Since there are lot’s of bitcoin here, exchanges are focusing on reaching them and we’re looking for ways to ease the access to bitcoin to anyone who wants to buy or participate in this world.

We’re going to set a network of offline payment methods we’re users are going to be able to buy bitcoin in places like drugstores or supermarkets.

In the meantime we encourage more and more companies, stores and services to accept this new currency as a payment method.

How fast is BitPagos growing in Argentina and the rest of Latin America?

Well I can tell you that currently at bitpagos we have more than 400 active merchants accepting bitcoin and we’re processing more than U$S100K monthly.

BitPagos has also been accelerated by Boost.vc in Silicon Valle and successful financial rounds from: Tim Draper, Naranya Ventures, NXTP Labs, Stanford Investment Club and several angel investors


Coin4ce is also on a mission to make it easy for people across Latin America to buy, sell, and use Bitcoins. They made headlines in the Panampost this week for developing an application to pioneer Bitcoin in a Chilean Nightclub.

We spoke with Coin4ce about the current Bitcoin situation in the Latin Americas region and asked if they are looking to expand to further countries.

Can you see Latin America overtaking China in terms of growth/volume?

 

Austin DeLonge – Coin4ce’s operations manager comments:

I am not sure about LatAm overtaking China in terms of Bitcoin growth/volume. I think both markets will have exciting developments happening, but they are in different stages right now, so I personally don’t really compare them against one another.

Right now we are focused on Chile, Mexico, Peru and Colombia. We would potentially like to expand to more countries down the road, but no plans at the moment.

We are more focused on helping consumers buy and sell Bitcoins, so we don’t actually have any other merchants using our solutions to accept Bitcoins, but are happy to assist in the process if there are merchants with questions.

We are hosting a big Bitcoin vent tomorrow night in Providencia, Santiago and everyone is welcome! http://www.meetup.com/startupchile/events/156808202/

We are very excited to see continued growth in Latin America as more people start learning about Bitcoin and starting to use it. We always recommend that people do research to understand Bitcoin first, as it is a fascinating new technology. We also have a blog that we encourage users to check out for some educational pieces and updates about Coin4ce.

So there you have it. Bitcoins continue to go from strength to strength with many around the globe crying out for an alternative currency that they, the people can control.

Will the Bitcoin train ever stop? Lets hope not!

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India Gets The Green Light

Following a press conference organised by Bitcoins Alliance India, Unocoin,  one of the largest Bitcoin exchanges in India has been given the green light allowing users to continue accessing their accounts as of today (6th of January 2014) with regular trading commencing on the 8th January.

The conference was headed by India’s top taxation and legal expert Mr Nishith Desai, Founder & Managing Partner of Nishith Desai Associates. Mr Desai has meticulously analysed the techno-legal perspective of Bitcoin inline with current payment and currency laws and concluded that Bitcoins are in fact a legitimate currency and could provide many benefits to India’s economy.

The statement below was posted on the Unocoin website today:

After press conference organized by BAI headed by Mr. Nishith Desai, and after the take-aways of the conference are out to public through media, Mr. Nishith Desai has given us a green signal to start Unocoin operations which will be starting on 6th Jan 2014 when the logins will be enabled and Unocoin wallets will be accessible. Buying and selling of bitcoins will go live from 8th of Jan 2014. CoinMonk Ventures and Unocoin is very thankful to Nishith Desai and their team for being a part of press conference and guiding us through till here 🙂

Just before Christmas the Indian Bitcoin fever grinded to a sudden halt when the Reserve Bank of India (one of the most prominent banks) issuing a statement cautioning the public, traders and holders about the risks of dealing in the cryptocurrency.

The Reserve Bank of India is the central banking system tasked with controlling the monetary policy of the Indian rupee and are the governments ‘go to’ source regarding financial matters.

Although the bank only issued a warning, larger exchanges panicked which resulted in crypto trading grinding to a halt and access to wallets being frozen. As many put it, this was due the imminent risk of being arrested or breaking multiple foreign exchange and payment laws.

The leading Bitcoin exchange buysellbitco.in felt the full force of the Indian government four days after RBI issued a warning when their offices were raided in Ahmedabad by the Enforcement Directorate. The ED are the law enforcement agency and economic intelligence agency tasked with fighting economic and digital crime across the country.

As of today (06/01/14) buysellbitco.in still has the following message on their website:

Post the RBI circular, we are suspending buy and sell operations until we can outline a clearer framework with which to work.This is being done to protect the interest of our customers and in no way is a reflection of Bitcoin’s true potential or price.

It is yet unclear as to whether buysellbitco.in will continue trading, but we imagine most if not all exchanges will reshuffle their goals and frameworks and be trading again within the next few weeks.

All in all, great news for Bitcoin fans in India and around the world.

Mr Mahin Gupta, founder of the buysellbitco.in did not respond for comment.

“In bitcoin we trust”

 

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Bitcoin price just breached the £620 mark

The price for a single Bitcoin has breached the £620 mark for a second time on the popular exchange platform, Mt. Gox.

Bitcoin reached the £620 price at approximately 8:30am Greenwich Mean Time (GMT) and 3:30 Eastern Standard Time(EST) if you’re across the pond.

We first witnessed a similar rise last November when the Chinese were investing heavily in the digital currency. However shortly after the rise it crashed as quickly as it rose due to China’s central bank imposing several legal restrictions on the digital currency. They ultimately denied third-party payment processors and financial institutions from handling Bitcoin.

Despite repeated crackdowns by the Chinese authorities which crashed the market by more than 50%, the most popular Chinese exchanges are still pushing high trading volumes suggesting a legal loophole in deposits for the time being.

At the time of writing nearly 70% of the Bitcoin market share is taking place on exchanges such as BTC China and Huobi, with the remaining spread across USD and several other currencies.

Due to the unknown situation in China regarding deposits via bank transfers the price may have fluctuated due to a workaround imposed by the Huobi exchange.

A rumour started in the popular Bitcoin Reddit section which pointed towards the CEO of Huobi accepting deposits through his personal bank account to avoid the imposed restricts.

The main concern in this scenario is how long the loophole will remain active and will it ultimately result in the authorities shutting down trade causing further cataclysmic price crashes.

When the price crashed to around £250 between December 17th to 19th, it not only affected Chinese trade which is now recovering but also mainstream development and currency adoption. Below are some of the milestones which could of caused increased the volatility of the recent crashes:

  • Wall Street Investors said they would move into Bitcoin in 2014 Q1
  • Max Keiser said Netflix would adopt Bitcoin payments
  • Porn.com started to accept Bitcoin
  • Zynga is testing the Bitcoin currency
  • Overstock.com planning to accept Bitcoin
  • Victoria’s Secret Stores partnered with Gyft
  • eToro accepting Bitcoin
  • Latin America ?
  • “Hello San Francisco, Hello Bitcoin” advertising campaign by arisebitcoin.com
  • Pastebin accepting Bitcoin
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Netflix Gets The Bitcoin Fever

American movie streaming giant Netflix has been rumoured to be one of the first major companies to accept the Bitcoin digital currency as a payment method.

The rumour was started by Timothy Maxwell, famously known as Max Keiser from the popular financial report show “Keiser Report”. The prediction was made on the recently aired 545th episode.

The show itself provides a no bullshi* view on the shocking scandals which parade the financial headlines. He is the peoples financial cop known to lift the lid on elitist government lies.

Max Keiser posted the rumour on his official Twitter account @maxkeiser at 7:54 AM today to nearly 90,000 thousand followers causing the rumour to surface on the front page of Bitcoin Reddit.

We are unsure as to how legible the Netflix rumour is at this point, but it’s worth noting that Max Keiser successfully predicted the recent Zynga Bitcoin adoption before that too became public knowledge. This suggests he may well be correct again and have some insider  knowledge or close contacts at the company.

As a digital service it makes sense for Netflix to accept Bitcoin as it would open the services reach to a far wider global demographic.

The news, rumour or eventually truth is none the less fantastic for the Bitcoin community. Netflix adoption would ultimately raise awareness and promote the currency to millions of people strengthening the coin inline with current payment methods.

Long live Bitcoin (with or without Netflix)!

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Malaysia Gives Bitcoin the Green Light For Now

The Malaysian Federal Reserve also known as the Bank Negara Malaysia and Central Bank Of Malaysia has published a statement regarding the official view on the Bitcoin crypto currency.

The official statement was published under the ‘Notices & Announcements’ section on the bnm.gov.my website on the 2nd of January 2014.

The Bitcoin is not recognised as legal tender in Malaysia.The Central Bank does not regulate the operations of Bitcoin. The public is therefore advised to be cautious of the risks associated with the usage of such digital currency.

The banks statement was extremely brief suggesting that a stance on the currency has not yet been decided by the government as of yet.

One of the surprising yet hypocritical roles of the bank is the development of affordable and available financial service which does not discriminate, simply put a bank which is open to the rich and poor.

Although the bank is the largest within Malaysia, the eventual decision may ultimately be made by the Alliance for Financial Inclusion(AFI) which the Central Bank Of Malaysia is an important principal member drafted with the powers to act a speaker with one voice on financial policies.

The most important note to take from the announcement is that Bitcoin and other crypto currencies have not been deemed illegal in Malaysia.

One of the largest Bitcoin exchanges in the country, bitcoinmalaysia.com has seen fast growth within the digital currency and an every growing source of traffic heading to the website. The website reported on their blog that December 2013 was the heaviest month for traffic.

 

Localbitcoins also has a growing number of Malaysian traders and buyers operating on their website https://localbitcoins.com/country/MY

 

 

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