India Just Dealt a Huge Blow to Bitcoin

The Reserve Bank of India (RBI) remains steadfast in its stance on not using bitcoins — or any other cryptocurrency — as a form of payment in the country.

Our current position on bitcoins is that we will not be using it for any payments and settlements…though the technology underlying cryptocurrencies will not end,” Executive Director of RBI, S Ganesh Kumar, said when asked about the matter at the FIBAC banking event, according to Money Control.

The news came a day after the exchange rate of bitcoin reached yet another all-time high. On Nov. 5, it was reported that a single token was worth $7,610.80, which is more than twice its value when compared to its exchange rate three months ago.

So far, only a few establishments in India accept cryptocurrency as a form of payment for goods, a few restaurants, paying for books or movie tickets. According to Quartz, it is mostly used as an investment option in the country.

Kumar added that blockchain technology has potential and is already being used by banks in India for overseas transactions, international remittances and more.

The Indian government’s opposition to bitcoins and other cryptocurrencies have displeased some of the supporters of the trade in the country. One of the reasons why the government holds its firm stand against this form of currency is because of its potential misuse for criminal activities such as money laundering and fraud, Financial Express reported.

Although, some groups are still open to discussing the matter with the people in charge.

We will do our best to continue with our efforts to educate the government about crypto-currencies. It can be useful for India by turning the country into a fintech hub, to increase financial inclusion, and there are several other benefits of it, said Sandeep Goenka, co-founder of a bitcoin exchange company Zebpay.

Featured Image via Wikimedia Commons / Isokivi (CC BY-SA 3.0)

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