Which page of the morning newspaper do you read first? Front page, sports or finance? Or maybe it is the advertisement page for many. Whichever may be the case, but recently, every day there is a constant topic coming under the scanner in the financial page, disheartening for coin lovers. We are talking about Bitcoins. Some of the biggest markets of cryptocurrencies like India has put a strict ban on transactions using bitcoins.
The supreme financial body of the country, Reserve Bank of India (RBI) has instructed the banks and e-wallets to stop dealing with virtual currencies, in terms of products and services with immediate effect. The money from person’s bank account and credit cards cannot be transferred to his crypto wallet. The bank states the risks associated with transactions in virtual currencies, such as security, money laundering, market stability etc as the reasons for this ban. Other countries have also started steps in similar lines like China, Japan, South Korea etc.
What could have done to make the bitcoins comply with the rules and regulations?
The sudden surge in the demand of bitcoins may have lead to diversion of cash into virtual currency on a massive scale. Bitcoins should not have seen just as a good investment option to escape legal formalities of having too heavy bank balances. The mammoth size of stored bitcoins may have sent warning signals to the ruling bodies. Why would you save on such a scale when these coins have numerous other uses?
Bitcoins could be exchanged and kept in constant rotation in the market by crypto trading. In this way, liquidity and transparency in the market may have been maintained. The governing authorities do agree to the power of bitcoins in managing the economy and therefore promotes the service of leading organizations like Blockchain for maintaining the transparency of financial movements.
When there are many international and regional merchant franchisees are happily ready to accept payments in bitcoins, it should have become a festival for those with huge collections of bitcoins. Unused coins in alarming volumes can send signs of tax evasion and third-party fraud.
Such was the sudden rise in the value of bitcoins, it was suspected to promote everything negative about money- from money laundering, tax evasion to crimes and market meltdown.
All is not dim for the virtual money lovers. The ban could be temporary, for investigating the impact of bitcoins on paper money and economy. The final relief and lifeline for bitcoins can be expected from the ‘rule above rules’ of US Securities and Exchange Commission.