International Bitcoin Exchange Buttercoin which recently raised close to $1.6 mn from Google Ventures, Y-Combinator, Reddit Co-Founder Alexis Ohanian and others is talking to financial Institutions in India to set up white labeled Bitcoin exchanges for them.
At $71 bn in 2013, remittances to India is the largest in the world. Naturally, it becomes a key market for the company which wants to revolutionize remittances with Bitcoins.
Sunny Ray, the Director of Business Development for the company, told NextBigWhat that talks are in early stages and it might be a while before anything happens. “We are talking to banking and NBFCs who already have the required licenses to see how we can set up Bitcoin exchanges for them,” he said.
Buttercoin sets up local Bitcoin exchanges in countries and facilitates local remittances at a lower fee. The startup is also trying to setup similar exchanges in other countries in Europe, Latin America and Asia, said Ray.
Bitcoins in India
A global bitcoin conference is round the corner. Between December 13-14, a group of bitcoin enthusiasts and companies dealing with Bitcoins are organizing a conference in Bangalore. One of the people behind the initiative, Vikram Nikkam, has setup an ecommerce site called MadOverCoins on which you can buy various things in exchange of Bitcoins.
These are very early days for Bitcoins in India. About 50,000- 100,000 bitcoin clients have been downloaded in the country and a few have started waking up to the potential of the crypto currency. There is a community of about 500 people in India who are trying to make Bitcoins mainstream. There are a few entrepreneurs working on Bitcoin related businesses in the country. Ahmedabad based entrepreneur Mahim Gupta’s website called BuysellBitco.in fetches him a turnover of $200,000 a month, the TechCrunch pointed out.
Bitcoin Regulations in India
Regulators in India have taken a “wait and watch” approach, Nikkam told NextBigWhat. Currently, the currency is not regulated in India by the Reserve Bank of India. However, the central bank is not completely unaware of it.
The RBI said in its June 2013 financial stability report:
Globally, the use of online and mobile technologies is driving the proliferation of virtual banks, virtual currencies (Box 3.4) and provision of banking and payment services by unlicensed entities. While leveraging on technology has resulted in many benefits, especially, in extending the reach of the financial services, these developments pose challenges in the form of regulatory, legal and operational risks.
Couple of months ago, when I met with Nikkam, Ray and Sathvik V, few of the people who are behind the global Bitcoin conference in Bangalore, Bitcoins were at about $100. However, after Federal Reserves Chairman Ben Bernanke told the United States Congress that virtual currencies “may have long-term promise,” a Bitcoin is now worth nearly $1200!
Indian authorities are likely to follow the footsteps of regulators in United States when it comes to Bitcoins.
If you are new to the idea of Bitcoins, read: Bitcoin 101: Five Things You Must Know About Bitcoins.