Indian Startups Allow Bitcoins Legally As A Result Of A Regulatory Gap
In India, a statement issued by the finance minister to fight against the utilization of virtual currencies appeared a gap in which Indian small businesses have sought to exploit. In the meantime, the gap does permit small businesses to allow bitcoin payment legally but specialists are more concern about its validity.
The Gap
Startups in India are in search of a way to allow the payments via bitcoin and other virtual currencies that are legally accepted by the State, while the country is presently developing a regulatory framework for virtual currencies.
In the previous month during the budget speech the Finance Minister of India, Arun Jaitley declared that “the Indian government considers cryptocurrencies illegal and vowed to stamp out their use” Tech Circle detailed:
“However, Jaitley did not specifically state that trading in cryptocurrencies was illegal, which is why it continues to be business as usual for Indian cryptocurrency exchanges such as Zebpay and Unocoin.”
In addition, the news agency questioned the worker of a used car marketplace located in Mumbai, Truebil, which is taking advantage of this apparent gap. In 2015, the startup was established and Paix Technology Pvy Ltd operates the startup and has found ways in which to allow payments using virtual currencies but more particularly bitcoin. The company has been reported to sell 200 cars, and add new listings of 1000, according to Techcrunch.
Working with Unocoin
The publication made clear that “…”. The company does not allow virtual currency payments online and also does not reveal any prices in bitcoin. Shubh Bansal, the company’s co-founder and head of marketing sighted to the publication that “this move is perfectly legal,” stressing:
“We are not accepting the [crypto] payments directly…Unocoin as our partner will receive the ‘crypto-assets’ from the consumer and then change it into a fiat currency before depositing it in our bank account. This brings it under the legal purview of existing laws.”
Customers and startups are not charged by Unocoin, as indicated by Truebil. Naveen CT, the vice president of sales and business alliances at Unocoin explained to the news agency that the collaboration with Truebil will assist in the rise of the number of points in which digital currencies are allowed in India.
Moreover, in India, other businesses are devising ways to allow virtual currencies payments legally. A virtual currency specialist elaborated that numerous firms taking a similar route to that practice by game companies which accept clients to purchase cryptocurrencies and “spend them I the game”, reported by the publication, stating that “This is quite legal and is in common use by Android game developers”
Is this Procedure Really Legal?
Legal specialists have raised their eyebrow on this procedure, the news agency confirmed. A partner at law firm Lakshmikumaran & Sridharan, Prashant Philips, told the publication that “Such transaction would most certainly be on the government’s radar.”
In the meantime, the government has accepted that there is no precise establishment to punish virtual currency trading, “the government has clearly indicated that it considers the validity of such dealings to be par with Ponzi schemes”, he elaborated, additionally:
“If a formal notice is passed declaring such transactions as Ponzi schemes, then such transactions may be punishable in terms of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.”
