Bitcoin is a type of electronic
currency which has an independent form of its own, unsupported by any real
asset or specie, such as a metal coin. The government has not found a way yet
to regulate this kind of currency and neither has the central bank recognized
it as legitimate currency. Instead of that, the generation of Bitcoins is based
on an algorithm which structures a decentralized peer-to-peer transaction
system.
The idea behind the Bitcoin comes
from attempts to reduce transaction costs. It was meant to boost the e-commerce
industry by enabling the users to validate the transactions based on this
currency. Although Bitcoins can be used to purchase items online but very few
retail establishments accept it as a currency or accept them in exchange for
gift cards or other small purchases.
There has been a debate over whether
Bitcoins can be considered as real money or not. In order to constitute it as “security”
government authorities had to be satisfied that the investments constitute an
investment of money.
It is clear that Bitcoin can be used
as money. It can be used to purchase goods or services and to pay for
individual living expenses. The only limitation of Bitcoin is that it is
limited to those places that accept it as currency. However, it can also be
exchanged for conventional currencies, such as the U.S. dollar, Euro, Yen, and
Yuan. Therefore, Bitcoin is a currency or form of money, and investors wishing
to invest in BTCST provided an investment of money.
The scope of what amounts to a
“security” is quite wide, and it is therefore not surprising that
Bitcoin-related investments are ensnared within its ambit.
At a more general level, it appears
that Bitcoin is yet to be specifically prohibited or regulated, although there
are moves to study the implications of Bitcoin from a legal and regulatory
perspective. Moreover, whether subject to regulation or not, Bitcoin will
likely give rise to implications under several areas of the law, including
taxation, consumer protection, money laundering, and so on.
It is not clear if the regulatory
authorities in India have begun to consider the implications of Bitcoin, but
that might be required in the near future, particularly if this form of
currency becomes more popular in usage. The Reserve Bank of India (RBI) will
certainly be seized of the issues, given its mandate to regulate the market for
currencies. Going by the US example in the Shavers case, the
Securities and Exchange Board of India (SEBI) will have to consider the
implications from an investment or securities regulation point of view.
The RBI has always warned the
investers about the crypto-currency risk behind dealing with Bitcoin currency
though it has never opposed its working. Also, there has been a lot of
confusion amongst the masses as to in what way will the currency be taxed.
Entrepreneurs who doled out the currency have been trying to come up with
concrete plans to deal with complaints with regards to “know your customer” and
money laundering schemes associated with virtual money.
However, it is clear that the
masses’ knowledge and understanding of this subject has advanced and people are
coming forward to get involved with virtual currencies and even to acquire jobs
in companies. The virtual money tree is showing a healthy growth throughout the
world, it is only a matter of time when it will be in common usage.
No comments:
Post a Comment