In the last one year, the price of one Bitcoin, world’s first and largest cryptocurrency, which is still not a recognised legal tender in several countries, including India, has been rising steadily, having risen almost three and a half times since October last year. One Bitcoin is worth about Rs 5.5 lakh now.
However, what many do not know is that the “illegal” currency is already gaining ground in the country.Post-demonetization, which made hoarding of vast amounts of cash difficult and tricky proposition, different types of cryptocurrencies have replaced the “black” portion in property deals.
Investigation conducted by DNA, which included attending several meetings where cryptocurrency was being hard-sold, especially as an investment option, shows that cryptocurrency is fast replacing the cash — read black — component in real estate deals.
“Instead of the cash part, many sellers are now opting for crypto coins for property deals and this is especially true of NRIs, who can, with a few keystrokes, move this money abroad,” said a real estate dealer. He also added, “Many domestic sellers are also accepting these crypto coins instead of cash, as it is easy to handle and also, unlike cash currency, it appreciates in value almost on a daily basis.”
Moreover, crypto currency it is also being offered as an investment option — with real estate brokers, who left the real estate market due to the ongoing slump, offering deals to gullible investors looking to make easy money in closed-door meetings. To make Bitcoins more acceptable, these persons are also part of a drive to push them through multi-level marketing (MLM) process.
The number of realty brokers, who are now part of this racket, is huge.
Almost 70 per cent of erstwhile agents have given up the old trade. They have joined the closed group offering cryptocurrencies. They lure investors on the assurance of returns of over 300 per cent in months.
“With a severe downturn in real estate sector, brokers have either shut shops or moved to other businesses. As cryptocurrencies are attracting speculators with promise of astonishing returns. Speculation is that cryptocurrencies are replacing cash component in real estate and even high net worth individuals are pooling into groups and are investing in these currencies and channelling them into real estate,” said Venket Rao, founder & CEO, Intygrat Business Advisory (P) Ltd.
Sources involved in the trade told DNA that, in India, cryptocoin exchanges have been adding over 2,500 users a day and have now reached five lakh downloads.
“Have you seen Bitcoin returns in last one year? We are doing it in ATC, one of the popular local cryptocurrency. An investor has to deposit minimum Rs 40,000 as membership fee for entering a group and getting a digital wallet issued. Now a new member needs to invest some amount, which the member can check in the wallet as code money in London exchange NOVA”, said Kapil Kumar, a Faridabad-based former property dealer.
But, isn’t it difficult to trade in Bitcoins? “You can easily buy Bitcoin with Indian currency from any online banking channel or through NEFT/RTGS. Selling Bitcoin is just as easy, you will receive INR directly into your bank account. All banks that have IFSC are currently supported”, claimed Unocoin, an Indian cryptocoin exchange.
Incidentally, concerned over the inhibited trade in the new-age currency, the Supreme Court on November 13 asked the government and its agencies, including SEBI, Income Tax Department, RBI and Enforcement Directorate (ED, on how they planned to regulate the cryptocurrencies.
A Bench of Chief Justice of India Dipak Misra and Justices AM Khanwilkar and DY Chandrachud noted, “... Emerging trend of crypto money, if unchecked and unregulated, is a threat to exchequer’s money and financial sovereignty of the country.”
WHAT IS CRYPTOCURRENCY?
- Cryptocurrencies, including Bitcoin, are virtual money, which don’t have any physical backing like other currencies. If you want to buy something through Bitcoin, you have to just transfer a code to the seller’s wallet account online. Each coin can be further split to ease transactions.
- Bitcoin has a payment network which is managed through a closed group of computer network. Those backing it claim it is transparent and all Bitcoin transactions can be monitored any time by anyone. The only hitch: You can’t find the owner’s identity. It’s decentralised and is not tied to a bank or government and allows users to spend money anonymously.
- The records of the Bitcoin transactions are stored on thousands of computers across the globe. The price of Bitcoin depends on demand and supply of users.
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