Improved regulation in India and many other countries has not affected the spread of bitcoins and other virtual currencies, whose number is growing fast towards a century, valued at $13 billion. many new entrants like bitgem, catcoin, unobtanium and sexcoin, have emerged even as regulators globally grapple with the risks posed by such currencies.
At least 93 virtual currencies are currently in use by people globally on the internet, as also for some off-line transactions, and their total valuation has reached $13 billion (over Rs. 80,000 crore). Bitcoin alone accounts for over $ 9 billion, as per estimates. The total value of bitcoin and other virtual currency trades in India is estimated to be worth only a few crores now, but their use is growing and NRIs are expected to be dealing with them in a big way. Within four years of arrival, bitcoin has become the world’s most expensive and its per unit value crossed $1, 200 level or about Rs. 63,000 recently, although the prices are now below $ 750 (Re. 45,000).
These currencies are being used to pay for goods and services with retailers, restaurants and entertainment venues. Some universities, cafes and bars accept bitcoins and even products like bikes and furniture are being sold online using them. However, experts feel that virtual currencies expose users to risks and also losses arising out of scams perpetrated by cyber criminals trying to make a quick buck. Illegal drug cartels and money launderers are increasingly opting to transact through virtual currencies due to anonymity and low transaction costs.
While most platforms require photo IDs, address proof and online banking account details, the under-ground market is teeming with unscrupulous operators. After suspending their operations for a few weeks amid growing regulatory glare, many operators have resumed their business. Many bitcoin operators and some corporates have recently stepped up their lobbying for a clear regulatory framework for digital currencies in India.