RBI reiterates warning about trading in bitcoins

Reserve Bank of India (RBI) on Tuesday reiterated its warnings on the bitcoins, just days after the cryptocurrency hit a record high at around $11,800. Though it is not known what prompted the central bank to issue a warning, it comes close on the heels of the Luxembourg-based Bitstamp Exchange, …

Reserve Bank of India (RBI) on Tuesday reiterated its warnings on the bitcoins, just days after the cryptocurrency hit a record high at around $11,800. Though it is not known what prompted the central bank to issue a warning, it comes close on the heels of the Luxembourg-based Bitstamp Exchange, which trades 24×7, said the cryptocurrency trade climbed to $11,799,99. This is the third warning from the central bank on the virtual currency, a segment it does not regulate.

RBI had previously said those trading in virtual currencies were doing so at their own risk, given that the central bank has not given a licence or authorisation for any company to deal in such crypto currencies.

Compared to the global play in bitcoins, India’s exposure is minuscule, but it is growing and capturing interest.

Compared with the global bitcoin capitalisation of $27 billion, Indian bitcoin landscape is at a very nascent stage. As per industry experts, the turnover of bitcoins in India stood at Rs 300 crore and is expected to grow exponentially in the next few years. In addition, the user base is set to explode by 200-300%. This is a clear reflection of bitcoin as an emerging asset class.

Way back in December 2013, RBI had issued its first warning that it has not given any licence or authorisation to any entity to operate such schemes or deal with bitcoin or any virtual currency, adding that any user holder investor or trader would be doing so at their own risk as RBI does not regulate such schemes.

RBI has mentioned that it has been looking at the developments relating to certain electronic records claimed to be ‘Decentralised Digital Currency’ or ‘Virtual Currency’ such as bitcoins, litecoins, bbqcoins and dogecoins, among others, their usage or trading in the country .

RBI had cautioned that the virtual currencies are in digital form and stored in electronic wallets that can be hacked or can be lost due to a malware attack. The payments in virtual currencies take place peer-to-peer without any authorised central agency. The currency is not backed by any asset resulting in their value being one of speculation. Huge volatility in the value of the virtual currency has also been noticed.

The creation, trading or usage of VCs including bitcoins, as a medium for payment are not authorised by any central bank or monetary authority. No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities.

RBI has also stated that it is currently examining the issues associated with the usage, holding and trading of VCs under the extant legal and regulatory framework of the country, including Foreign Exchange and Payment Systems laws and regulations.

THE POTENTIAL

  • As per industry experts, the turnover of bitcoins in India stood at Rs 300 crore
  • It is expected to grow exponentially in next few years
  • In addition, the user base is set to explode by 200-300%

Bitcoin Alternatives: How to Buy Ethereum, Litecoin, Monero and Other Cryptocurrencies

Bitcoin’s rising value has grabbed all the attention, but it’s not the only cryptocurrency out there. Bitcoin Cash, Dogecoin, Ethereum, Litecoin, and Monero are just some of the other cryptocurrencies out there. If you wish to buy any of these in India, you might not find it very easy to do so directly. A quick …

Bitcoin’s rising value has grabbed all the attention, but it’s not the only cryptocurrency out there. Bitcoin Cash, Dogecoin, Ethereum, Litecoin, and Monero are just some of the other cryptocurrencies out there. If you wish to buy any of these in India, you might not find it very easy to do so directly. A quick search only revealed rather less-known and suspicious looking sites selling Ethereum in India — something you want to avoid in general.

Ethereum, Litecoin, Dash, and Other Bitcoin Alternatives Explained

However, there’s one reliable way of buying Ethereum or any other cryptocurrency in India, which essentially involves buying Bitcoin and then converting it to the cryptocurrency of your choice. For this, first you need to buy Bitcoin in India and then convert it. We used this method to buy Litecoin in India, but it will work for practically all other cryptocurrencies.

What Is Blockchain? Blockchain Technology Uses Beyond Bitcoin and Cryptocurrency

  1. First you need a wallet for the cryptocurrency of your choice. You can visit the official website for Ethereum or Litecoin or others to find a download link.
  2. Once you’ve downloaded this wallet on your PC or phone, you need to set it up. This involves setting up two passcodes, one of which is a series of up to 24 words. Copy the receive address for your cryptocurrency.
  3. Next, you need to head to a cryptocurrency converter such as ShapeShift.
  4. Select Bitcoin as the input currency, and the output currency is obviously the one you want. In our case, the output currency was Litecoin.
  5. The address you copied in step 3 above needs to be pasted into the Deposit Address field on ShapeShift.
  6. You can copy the receive address from your Bitcoin wallet and paste it into the Bitcoin refund address field in ShapeShift. In case the transaction fails, the money will get refunded to your Bitcoin wallet quickly.
  7. Now check I agree to terms, click Start transaction.
  8. ShapeShift will now give you a new deposit address. Copy this and go back to your Bitcoin wallet. Now send the Bitcoin amount to this address.
  9. Switch back to ShapeShift and wait. Once the Bitcoin is received by ShapeShift, it will quickly convert it to the cryptocurrency of your choice.

bitcoin ethereum shapeshift Shapeshift

Note that ShapeShift also has mobile apps, and while the process remains the same, the steps differ slightly if you want to use those to convert cryptocurrencies there. It’s also important to note that ShapeShift charges around 0.5 percent for conversion, and sending Bitcoins to ShapeShift also has a miner fee associated with it, which is something you have to pay for every Bitcoin transaction. That said, this remains the easiest way to buy Ethereum or Litecoin in India.

For more tutorials, head to our How To section.

Bitcoin is at an all-time high but should you still invest in it now? We discussed this on Orbital, our weekly technology podcast. You can listen to it via Apple Podcasts or RSS or just listen to this episode by hitting the play button below.

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