- Dr. Urjit R. PatelReserve Bank of India
- Shri S SelvakumarMinistry of Finance
- Shri Ashok Kumar SinghDirector (Information Technology) Ministry of Finance Department of Financial Services
- Mr. Arjun Ram MeghwalMinister of State for Finance
"BITCOIN" & Blockchain based Currencies (virtual) is not illegal
Issue of illegal Bitcoins is now a days in news, stating that Standing Committee has been created for the same. Reason of this letter to you simply means to put words of the common consumers against the said Committee. And also to make them aware about the facts.
Bitcoins and other blockchain based virtual currencies are not actually currencies. they are differently encrypted data, which people are funding it initially to support the technology, which is later on has been started to used as a currency.
1) Since these crypto currencies transaction data are being stored on different nodes across the globe which are connected to the specialized internet network, technically it is hard to regulate it.
2) Not a single country in the world has declared it as illegal, so we as an Indian really does not have any clue that then why it should be illegal in India
3) The Question which you have is "Who is regulating it?" Answer to that is, this kind of crypto currencies cannot be regulated by anyone including governments across the globe.
Finance & Exchanges:
1) Rate of this Crypto Currencies are purely based on what are the supply and demand of that crypto currencies, just like our stock markets and commodities.
2) People are rightfully funding those crypto currencies by their choices.
3) They are having freedom of keeping those crypto currencies in to their choice of storage available on internet just like we have demat accounts or they are downloading core of those currencies and store it on their computer just like we store Ornaments or hard cash in to the treasures.
4) It is being exchanged to the 3rd parties or to the available conversion platforms, just like We can transfer Stocks to one from another demat account or we may choose to sell it on available exchanges.
5) These crypto currencies are the ownership of the person who holds it and it depends on the person, when and where or to whom it needs to be exchanged or get it converted, Just like we have Gold Ornaments and we can decide to whom we will sell and at what rate.
1) These encrypted digital data is being used as currency and it does not have any physical formation it is digital only so it is also supporting "Digital India Initiative"
2) People have rights to decide where to sell and when to sell for the things which they own, technically it a part of human rights as well given by UN. Banning the use of it just because you cannot regulate it is the violation of human rights.
1) It is being created using and power supply of a central processing units (CPU) or graphic Processing Unit (GPU), which does not use any other row material other than that so using of that is tax free if manufacturing of it is the concerned
2) It is being generated on the basis of pre written and available free of cost on internet. So software development is also nowhere, since there is no money involved for creating it.
3) Once created and being used to exchange, rate is never consistent, it is purely depends on giver and taker whether to give fiat balance or service for this crypto graphic data or not.
What can be controlled?
1) Government can control cloud mining of such currencies, since most of the cloud mining does not happened within country and since Government of India has not clear their statement so far about this, people are mining it out side of the country, by investing in same crypto currencies and then sending it to the 3rd party who have their set up of mining outside of India. Consumers have the risk of 3rd party or company makes default and they may lose their crypto currencies.
2) Government can issue licenses for mining this kind of crypto currencies and without license you can define it as illegal. You can issue licenses on the basis of the setup to be established within Indian Territories.
3) Government can issue licenses to the exchanges who would like to run exchanges who technically enough security parameters.
4) Government can also regulate wallet or storage services in regards to storing crypto currencies so people may choose to store their crypto currency securely.
5) You can give notification and can have audit team on exchanges about the KYC have been taken
6) Government can also ban or declare illegal to exchange of these product in cash for more then certain amount
7) This Crypto Currencies can be considered as a property of the actual owner and property tax can be applicable on the bill of purchase of the same.
What cannot be controlled?
1) Rates of these are depends on supply and demand of that around the world, so it is similar to our mutual funds which are subject to market risk and instead of offer document they have to read and understand the technology whitepaper carefully of the crypto currency before investing
2) Storage is something a biggest question is it requires lot of space and high speed internet which is in most of the cases not available within Indian Boundaries so it needs to be hired from outside of India.
3) Sending and Receiving it outside of India also cannot be banned as if we do so, we are having a problem of awareness of it as of now, so we will not be able to compete rates of the same with International market, which will put India back. Also this can be downloaded on CPUs and hardware, so obviously if rates will be down over here then we will be technically encourage uncivilized people to smuggle the hardware of computer parts, which will again a problem for a country and new era of smuggling to the uncivilized people.
"Use of it could be illegal or for money laundering"
Along with this there are few more things, which can also be used for illegal or money laundering such as, if Crypto or Virtual Currencies like Bitcoin needs to be banned or declares illegal because of the fear of it being used as illegal
We would also recommend governments to ban or declare it illegal to the following as well
2) Physical Gold
3) Physical Silver
Therefore, I Strongly Pledge and Appeal for not to declare Bitcoin or any other crypto currencies illegal or ban in my country illegal.
Kindly sign it and join the petition. It is about our Freedom.
- Reserve Bank of India
Dr. Urjit R. Patel
- Ministry of Finance
Shri S Selvakumar
- Director (Information Technology) Ministry of Finance Department of Financial Services
Shri Ashok Kumar Singh
- Minister of State for Finance
Mr. Arjun Ram Meghwal
"BITCOIN" & Blockchain based Currencies (virtual) is not illegal
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