There has been some controversy regarding the legal status in India over the past few weeks. Although the government never officially banned cryptocurrency, various ministers are not too keen on people using bitcoin either. The lack of clear regulation hurts bitcoin’s status in the country. Interestingly enough, most startups and enterprises are not too concerned about the negative effects the lack of regulation may have.
It is evident the lack of bitcoin regulation means consumers remain wary of cryptocurrency altogether. Promoting global adoption of bitcoin and popular altcoins will be challenging, to say the least. Until governments decree the status of cryptocurrency in their country, there can be no spectacular growth anytime soon. Then again, startups in India are not concerned about the lack of regulation right now.
In fact, companies such as Unocoin, Zebpay, and Coinsecure remain very optimistic about bitcoin’s chance of success in the country. No one should invest in bitcoin without knowing all the facts and making a thorough cost-benefit analysis. However, that does not make bitcoin a more or less risky investment compared to stocks, bonds, or even foreign currencies. In fact, bitcoin has been one of the best performing assets over the past few years, indicating plenty of potential for value appreciation.
Startups in India are leaning toward creating a self-regulatory framework until the government can get their ducks in a row. Bitcoin startups force customers to implement KYC and AML reporting from day one. At the same time, all of these companies acknowledge investing in bitcoin is a high risk – high reward kind of deal Bitcoin is one of the very few assets in the world accessible to anyone, even the unbanked population. Moreover, bitcoin is still legal in India based on the current regulation.
Legality issues are one of the main hurdles hindering global bitcoin adoption right now. Japan is one of the very few countries officially legalizing bitcoin, and it seems to do wonders for the coal economy so far. It is a very disruptive concept that baffles the mind of regulators and policymakers for many years now.
One cannot apply existing regulatory requirements for bitcoin startups, as there has never been a more disruptive form of money in the past. For all intents and purposes, bitcoin remains legal in India, until the government officially bans it. Right now, it seems highly unlikely that will ever happen.
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