THE SENIOR ANALYST
penetration of Internet, will be too low for
Government and Central Bank to even try to
protect it.
How open will the Central Bank be of a currency
in these parameters only time can tell.
The facts spell an even gloomier picture. Of the
34,648 Bitcoin downloads in India since
November 2008; almost 70% took place in 2013!
There is a predominant perception that Bitcoins
are nothing but clever device for money
laundering.
The recent capital controls introduced by RBI
could motivate people desperate to get money
out of country to find alternate methods of doing
so. Bitcoins can be used to easily take money out
of country because it is digital, not monitored by
central bank and easily tradable in any country.
The $70 billion overseas remittance segment is a
big opportunity for Bitcoins. Who is to say that its
use will not be for destructive rather than
constructive activities?
Banking authorities in India, specifically RBI have
remained tight lipped about Bitcoins, saying they
are waiting and watching. There is no formal
policy to moderate Bitcoins in India, or for that
matter anywhere in the world.
Then again, it is safe to assume that Governments
and Politicians will never like a currency that
cannot be manipulated to their whims.
Jan 2014
For an emerging market like India, Bitcoins pose
as many challenges as it opens up opportunities.
Already cases like Silkroad.com, which sold drugs
and other illicit items in exchange of Bitcoins, has
proved that the system, while robust and logical,
relies too heavily on the goodness of the people
who use it. For every legal item that can be
purchased through Bitcoins, the chance of it
being used for illegal activities is always greater.
All who claim freedom from the clutches of the
Central Bank and Government control need to
bear in mind that Heroes can as easily become
Tyrants and Saviors are called so only after the
war is over. Bitcoins maybe the monster which
may come back and bite its own creators. Sooner
than later, power corrupts all, and corrupts
absolutely.
Is selling products from one person, to another
person, in a form which is not regulated,
tantamount to crime? But then again, can a fair
and bias free system be established, where
power is equally distributed, even if only on
paper?
Food for thought…
By Umang Jaketia & Ankur
(Welingkar Institute of Management
Development & Research (Mumbai))
In order to enter the Bitcoin market, fiat currency
will be required. With increased proliferation of
Bitcoins, the fiat might lose its importance. But
until the flow between merchants and consumers
becomes uninterrupted, Bitcoin will have
difficulties in succeeding.
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