As the period for public comments regarding the regulatory framework for bitcoin comes to an end, a debate heats up among members of the Indian Parliament about the legalization of digital currencies. Meanwhile, bitcoin trading volumes remain strong in the country.
Parliament Members Divided Over Bitcoin
At a Parliamentary Standing Committee of Finance meeting last week, a heated discussion erupted among members of the Indian Parliament about bitcoin.
A number of Parliament members, including BJP member Kirit Somaiya, “cautioned the finance ministry officials present at the meeting against any move to legalise bitcoin,” according to The Economics Times, India’s leading business newspaper.
A source told the publication:
Members feared that it [bitcoin] could become a parallel instrument for cycling black money and dodgy transactions and also be a source of terror financing.
They wanted the government to look into the vulnerability of bitcoin. Somaiya who has repeatedly spoken against the digital currency, calling it “illegal” on numerous occasions, raised a series of questions.
He asked the officials why the government was being ambivalent about this instrument, citing that they have not clarified whether it was a legally permissible instrument or not.
He also demanded to know whether officials are properly briefing the prime minister about the risks of bitcoin.
Bitcoin Could Soon Be Regulated in India
Currently, the same government has been considering legalizing the digital currency. Last week, the Finance Ministry started soliciting comments from the public on how to best regulate bitcoin. The deadline for submissions is May 31, and 3,357 comments have been submitted at press time. The majority of them are in support of regulating bitcoin.
“Regulating bitcoins will address many such concerns and queries, including market acceptance, customer trust, investment security, money laundering, hawala, etc,” Hesham Rehman, co-founder and CEO of Bitxoxo Bitcoins Online, was quoted by The Times Group as saying. “For instance, regulations like strong eKYC and penalizing bitcoin trading in cash will help proper transaction records which will negate all the chances of any sort of illegal activity.”
Karthik Iyer, India’s Ambassador of the blockchain think tank P2P Foundations, also offered his viewpoint on the situation:
The government should think about treating cryptocurrencies as a commodity if not a full-fledged currency with exchange value. There is a lot of arbitrage in the markets and it can generate a great deal of wealth for India’s crypto traders.
India’s Bitcoin Volume
Meanwhile, bitcoin trading volumes in India have exploded. Last week, the price of a bitcoin skyrocketed globally. During that spike, it traded at nearly a $1,000 premium in India as supplies to the country have been limited.
This month, leading Indian bitcoin broker Zebpay announced that it had reached a milestone of over 500,000 app downloads and is adding more than 2,500 users daily. Struggling to keep up with the surge in new users and volume, Zebpay announced, “we have put a temporary buy limit of Rs 50,000 per day due to the shortage of bitcoin stock.”
New user growth was also the cause of the downtime experienced at leading Indian bitcoin exchange by volume, Coinsecure. “We have been experiencing exponential growth of users on our website, causing slowness and stress on our systems,” according to a statement from CEO Mohit Kalra to Coinsecure’s customers.
Meanwhile, on the peer to peer Localbitcoins exchange, trading volumes in Indian rupee hit record highs as well, with nearly double the previous week’s volume of rupees traded for bitcoin.
Do you think that the Indian government will listen to their people and regulate bitcoin? Let us know in the comments section below.