After remarks by Indian govt. on bitcoin and other cryptocurrencies being an illegal tender, Indian bitcoin companies have found a loophole in it. By capitalization on this loophole, businesses are accepting bitcoin among other cryptocurrencies, apparently without breaking the law.
Indian bitcoin companies capitalizing on loopholes
Last month, at the budget presentation, the finance minister Arun Jaitley stated that bitcoin among other cryptocurrencies are not legal tenders. The government is already working on developing a regulatory framework for digital currencies for which a committee has also been set up. However, the startups in the country have found a way to accept these cryptocurrencies without breaking the law.
Though Jaitley had said that cryptocurrencies are considered illegal by the Indian government, he didn’t specifically comment that trading in cryptocurrencies was illegal. This is why the businesses like Unocoin, Zebpay among other Indian cryptocurrency exchanges continue to trade in them.
It has been reported that a startup, Truebil which is a used car marketplace is capitalizing on this loophole. Founded in 2015, the startup is operated by Paix Technology Pvt Ltd that has worked out a way to accept bitcoins and other cryptocurrencies as payment. It has been claimed by the company that they sell about 200 cars and add about a 1,000 new listings each month.
In partnership with an India cryptocurrency exchange…
According to the reports, Truebil doesn’t display any bitcoin prices or accept cryptocurrencies as payment online itself. The startup basically uses the POS application of Unocoin that will enable it to accept the bitcoin payments at its physical store.
The co-founder and the marketing head of this startup claim it a completely legal move further explaining:
“We are not accepting the [crypto] payments directly…Unocoin as our partner will receive the ‘crypto-assets’ from the consumer and then change it into a fiat currency before depositing it in our bank account. This brings it under the legal purview of existing laws.”
One notable thing is that Unocoin is charging neither the company nor its customers any fees. Unocoin vice president of sales and business alliances, Naveen states that this partnership will help in increasing the acceptance of cryptocurrencies in India.
Legality is in question!
According to an industry expert, there are other businesses and places that accept bitcoin and other cryptocurrencies without breaking the law and further explained:
“Many companies are taking a route similar to that opted by game companies which allow users to buy virtual coins and spend them in the game. This is quite legal and is in common use by Android game developers.”
People may believe it to be a lawful method but legal experts are expressing their doubts on these arrangements. It has been believed that such transactions would no doubt gain government’s attention. Given that government considers them in line with Ponzi schemes, the authorities might have them punishable under certain acts.
Do you think the Indian regulator would frown upon this and consider such transaction unlawful? Let us know below!
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I am an associate content producer for the news section of Coingape. I have previously worked as a freelancer for numerous sites and have covered a dynamic range of topics from sports, finance to economics and politics.