As cryptocurrency regulations start to pile up in India, a new trend is emerging for Indians to acquire cryptocurrencies from abroad, such as from relatives or friends with overseas accounts.
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The Indian government has recently intensified its efforts to strengthen the country’s regulations on cryptocurrencies, promising that a regulatory framework for them will be announced soon. Earlier this month, the Indian tax authority issued noticesto 100,000 crypto traders asking them to pay taxes.
The Blockchain and Cryptocurrency Committee (BACC), an industry group whose members include 7 cryptocurrency exchanges, is considering several initiatives, such as creating a database of crypto users and transactions, to comply with the government’s mandates. The Times of India elaborated:
With Indian exchanges like Unocoin, Zebpay, Coinsecure, keen on increasing regulation and scrutiny into transactions, bitcoin aficionados say buying from US exchanges is a more popular alternative for purchases.
As regulations tighten in India, bitcoin “enthusiasts are now tapping into their own NRI [non-resident Indian] network of friends and family members,” the news outlet added.
L R Dinesh is a bitcoiner who buys expensive items using bitcoin on overseas online sites. He told the publication, “For the online tech community, there are some who receive bitcoins as payment for gadget and video game reviews. But for regular purchases, one has to get a relative or friend with an overseas account to send over bitcoins.”
Dana L Coe, the CEO of bitcoin hardware wallet Bitlox, believes that one of the main attractions of bitcoin is privacy, the news outlet conveyed.
He explained, “If you are purchasing a particular medicine and someone collects the data and sells it to a pharmaceutical company — these companies can use sets of such demographic information to increase prices.” Furthermore, he noted, “Differential pricing, blanket invasion of privacy cannot happen if one uses anonymous and private payments,” adding:
People would want to shield their payments from the government, corporates or even their own families. With big data and consumer tracking websites, the need for privacy is heightened.
The advanced security on purchases made with bitcoin is another major incentive for Indians, the publication added. “The requirement of Aadhaar is a dampener,” Dinesh asserted, referring to the 12-digit unique identity number issued to all Indian residents based on their biometric and demographic data. “The community of techies, bloggers and geeks are quite antipathic to the continuous stem of leaks and insecurities reported with Aadhaar,” he emphasized, noting that “To try and unite bitcoins with compliance is going to keep real bitcoin miners away from Indian exchanges.”
Damodharan Sampathkumar of Renovite Technologies was quoted:
In India, RBI has mandated two-factor authentication for all online transactions. But outside of India, only single-factor authentication is required. So when it comes to using one’s credit or debit card to buy products on overseas sites one also runs the risk of compromising sensitive financial data and hacks. So using bitcoins would add one layer of security.