Alternative (virtual) currency Bitcoin, which is gaining popularity and notoriety worldwide at the same time, has created massive in confusion in India, prompting one of its advocates to demand a clear legal framework from the Reserve Bank of India (RBI).
The RBI had recently warned users of Bitcoin of legal implications and said it would not regulate virtual currencies whereas the tax sleuths have been looking at how to tax such users in India.
Given the situation, Bitcoin entrepreneurs all over the country are lobbying hard for its acceptance as a virtual currency in the country. They want the government to recognise and legalise trading of the currency generated by any computer through a software freely available on the internet.
Venugopal Badaravada, the first to take action against the RBI for this cause, has demanded via a legal document a clear legal framework for the currency within 30 days. He is a life member of Bitcoin Foundation Inc, USA.
The document, a copy of which is available with dna, contests every point of the December 24 RBI press release regarding Bitcoin.
The document raises important questions such as: “RBI has not made any statements whatsoever concerning as to under what provision of law is the usage of virtual currencies, an offence. There is also a serious concern as to what aspects of FEMA apply to buying and selling of virtual currencies.”
By 2040, it is estimated there would be 21 million Bitcoins after which there won’t be anymore of such currencies minted.
The current exchange rate for one Bitcoin is 927 US dollars. The rate is based on demand supply and over 1.23 crore Bitcoins have been minted this far globally. There are several softwares to store and transfer Bitcoins to accounts specifically made available for buying and selling of goods and services all over the world. The concept was the brainchild of Satoshi Nakamoto, a pseudonymous person or group that designed the Bitcoin in 2008.
Venugopal’s legal document also states that the RBI’s press release have caused confusion among those in India trying to create a legitimate business.
Repeated attempts to get the RBI version, failed to evoke any response.
The legal document demands a “clear policy framework” for regulating Crypto by immediately setting up a suitable committee or a congregation of experts from relevant fields such as information technology, finance and legal experts.