Bitcoin is an innovative digital or virtual currency form that is controlled by none which implies that like the regular currency there is no issuer to it. Commonly referred as 'decentralized digital currency', bitcoin is created as well as held electronically. The similarity that such bitcoins share with regular currency is that it is also emerges as a payment method or system. Know about the finer differences between bitcoins and a regular currency here.
Reserve Bank of India (RBI) Regulations for Bitcoins in India
In one of the PTI reports, RBI made a statement "The RBI advises that it has not given any licence/authorisation to any entity/company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc., dealing with virtual currencies will be doing so at their own risk". The apex body warned investors in such virtual currency of the potential financial, legal, operational as well as security related risk.
In another PTI report ,Arjun Ram Meghwal, Minister of State for Finance is quoted saying "No regulatory approval, registration or authorisation is stated to have been obtained by the entities concerned for carrying on such activities".
Procedure for Bitcoin purchase in India
Bitcoin, a freely tradable currency, can be purchased and sold on the different online exchanges or marketplace available for the purpose. Some of the most popular bitcoin wallets in India include Zebpay, Unocoin, BTCXIndia and Coinsecure.
Suppose you wish to make investment in Bitcoins using Zebpay platform. The procedure goes like this:
1. ID Verification: To make trading in bitcoin safe and as part of their strong compliance and self-regulatory procedure, you need to submit your PAN card for the verification process.
2. Make transaction payment towards bitcoin purchase in Zebpay Bank A/c: For every Zebpay account, you need to register one bank account with the bitcoin wallet company as it allows only bank to bank transactions. Payment is accepted via any of the following modes, including, NEFT, RTGS and IMPS.
3. Complete Bitcoin buy or sell order: The buy or sell link available on the Zebpay app facilitates you to enter the amount you wish to transact in and complete the buy or sell order.
With no regulated and standardized valuation procedure in place for bitcoins, users, traders and investors need to diligently exercise their purchase. On valuation issues relating Bitcoins, the RBI warned with no underlying asset and high speculation, traders dealing on such unregulated exchanges are making themselves subject to potential financial and legal risks.