With the increased excitement around Bitcoins and India’s own digital currency, Laxmi Coins, gearing up a March 2014 launch, the Global Bitcoin Conference held in Bangalore on 14th and 15th of December, played host to technology enthusiasts, cyber law consultants, investors, RBI and banking officials, telecom operators and others. This conference, the first of its kind in India, provided an overview of the state of the virtual currency industry today and its future potential. A panel of top venture capitalists also discussed what business opportunities are on the horizon for Bitcoin.
The conference which had more than 150 attendants, complemented the increasing light on Bitcoins in the country, and served as a forum to discuss efforts for convincing the government and RBI that Bitcoin is here to stay. A supporter, blueocean market intelligence attended the event. Here is a short recap of the highlights and observations:
– The cyber law consultants presentation at the conference highlighted the need for the development of Cyber Law Complaint Ecosystem for Bitcoins, suggesting an action agenda for the Bitcoin community in India. Referring to the ITA 2008, they pointed out that Bitcoin is an Electronic Document that is not digitally signed, and various service providers are intermediaries with certain legal obligations. They also noted that Bitcoin is not a bank note, since it does not come with a “promise to pay” obligation. It is the perception that Bitcoin is a currency and can be used for money laundering that creates a regulatory concern. If the community does not take steps to prevent criminal grade anonymity overtaking the Bitcoin transactions, regulatory backlash is inevitable. They urged the community to take appropriate and comprehensive steps to initiate a dialogue with the RBI and clarify the nature of Bitcoin, as well as the measures that the community is willing to take on addressing the regulatory concerns.
– With the proliferation of mobile devices and mobile payments in the country, telecom operators are exploring ways to extend their services with different alternative payment methods and keep their consumers hooked to the devices. Operators said that if defined appropriately with respect to regulations, Bitcoins can be used for micropayments in the country.
– The RBI, which had some representation at the conference, stated that it had adopted a ‘wait and watch’ stance to observe the developments. Nevertheless, they will follow the US, where authorities have decided to subject Bitcoins to money laundering rules applicable to all other financial transactions.
– Bitcoin based ventures such as CoinMonk, Buttercoin, BTCrobot, buysellbitco.in and HighBitcoin were also in attendance to provide information about their services/products and overview of the types of startups (bitcoin mining, exchanges, wallets, payments etc.) that are budding in India. Buttercoin, the International Bitcoin Exchange backed by Google Ventures, is already in talks with the Indian financial institutions to set up white labeled Bitcoin exchanges for them.
Most users of Bitcoins in India are from the Information Technology (IT) sector. One of the beneficiaries of the proliferation of Bitcoins is remittances, which NRIs (non-resident Indians) send back to their dependents in India. Bitcoins will increasingly gain popularity in India. According to SourceForge, the online platform that connects customers to open-source projects such as Bitcoin and facilitates downloads, there have been 35,648 downloads in India since the launch of Bitcoin. Of these, close to 70%, or 24,723 downloads, took place during this year alone. Ironically, the origin of Bitcoins came out of the need for a currency free of all regulations, however its value and awareness is rising on hopes that these very same regulators are taking note of its importance in the country. Right now, there is no regulation that says owning or transacting in Bitcoins is illegal. For the same reason, the crypto-currency is circulating unregulated in India. Digital currency enthusiasts present at the conference, reinforced the need for a local digital currency to help local businesses and also reach the people at the grassroots level. With the Global Bitcoin Conference behind us, time will tell if India’s first digital currency, Laxmicoin will be received after its launch and if regulators will change their stance.
At blueocean, we plan to keep a pulse on this activity, so stay tuned for more insights and news around the digital currency and payments space.