Indian officials revealed last week that the country’s tax agency and investigation taskforce have concerns about money laundering and black market activities associated with bitcoin. India’s Special Investigation Team (SIT) is in the midst of drafting a report detailing problematic issues regarding the decentralized cryptocurrency.
Also read: India Considers Issuing Its Own Bitcoin-Like Cryptocurrency as Legal Tender
Indian Officials Concerned With How Bitcoin Operates
RBI Executive Director Sudarshan Sen says the bank is still not comfortable with bitcoin.
According to an Indian publication, The Economic Times, government agencies in the country have concerns about illegal activities that could be tied to bitcoin. An unnamed source explained that the SIT taskforce is currently drafting a report about these concerns, and the final draft should be completed in a month.
“There are concerns on the way [bitcoin] operates — Some unaccounted money could be flowing into [cryptocurrencies],” explained the source familiar with the matter.
Following this statement, the news outlet reported that India’s income tax agency is also concerned with money laundering and illegal transmissions. “There are issues with large investments flowing into this currency,” said a senior tax department official. Moreover, an Indian central bank official told the press on September 13 that the institution still feels uneasy about bitcoin. “In regard to non-fiat cryptocurrencies, I think we are not comfortable,” explained Sudarshan Sen, Executive Director at the Reserve Bank of India (RBI).
Despite Government’s Opinion, Bitcoin is Thriving in India
After the RBI director’s statements, the bitcoin-based trading platform Unocoin said that bitcoin is thriving in the nation despite the central bank’s opinions.
“The Indian Bitcoin ecosystem is thriving — In metropolitan cities such as Delhi, Bengaluru, and Mumbai, there are a large number of existing and upcoming bitcoin quarries that are running in temperature controlled rooms, around the clock, every day,” explained Unocoin.
The company said that domestic Indian Bitcoin transactions have increased exponentially. By the end of 2016, the country had over 500 bitcoin-accepting merchants. “The number of Indian bitcoin investors is increasing at 2,500 a day,” claimed Unocoin. “In fact, it’s well known that bitcoin can be freely converted anywhere in the subcontinent into any physical currency — USD or INR.”
So it’s safe to say that India is indeed welcoming bitcoin with — semi-opened — arms, with the RBI keeping the handcuffs in place.
While Unocoin said it does not know if BTC will obtain legal status, it noted that “bitcoins aren’t necessarily ‘banned’ in India.” For now, Indian residents and Bitcoin startups will have to continue operating within the legal uncertainty until the government and the RBI come to a decision.
What do you think about India’s officials stating that they still have concerns with bitcoin? Let us know what you think in the comments section below.
Images via Shutterstock, Unocoin, and AP Photo Abhijit Bhatlekar.
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