The brightest and smartest minds across the world are closely scrutinizing the implications of the Blockchain applications. Invented in 2009 by a pseudonymous Satoshi Nakamoto, the most widely-known application is Bitcoin. The cryptocurrency allows decentralized transactions with no intervention of the central bank or the government. Bitcoin is based on the Blockchain technology and this revolutionary technology helps in confirming the decentralized transactions and also supports the Bitcoin mining process.
The Blockchain is a public distributed ledger that permits banks to revolutionize legacy processes, enhance operational efficiencies, and minimize costs. It also offers authentic data transaction. The Blockchain-based apps can’t work in isolation and the network of the banks must arrive at a consensus agreement in order to power this technology.
In order to complete a Bitcoin transaction, a two-way authentication is required. The Bitcoin transactions are anonymous and unchangeable, and each transaction detail is recorded on the blockchain. All transactions have to be validated and verified by the members of the network.
Today, the laws pertaining to Bitcoin are applicable all across the world. The Reserve Bank of India has prepared two official doctrines on virtual currencies. One is Foreign Exchange Management Rules, 2000 and the other one is Prepaid Payment.
The regulation of RBI on Prepaid Payment in India describes a number of possibilities. As per the rules and guidelines of RBI, there is only one roadblock against Bitcoin that is described as following –
3.2 Only banks which have been permitted to provide Mobile Banking Transactions by the Reserve Bank of India shall be permitted to launch mobile based prepaid payment instruments (mobile wallets & mobile accounts).”
Fiat or physical currency is mandatory to buy Bitcoin. If Bitcoin adoption increases in the market, then fiat currencies will eventually fade away. Till the time Bitcoin free flow between merchants and consumers is restricted, Bitcoin will not be able to enter India.
Bitcoin can be regulated in India through the below-mentioned activities -
Around 60 percent of India’s population is unbanked. The Reserve Bank of India and the Honorable Prime Minister Narendra Modi upholds the financial inclusion. Owing to this, Bitcoin adoption and usage is initiated and appreciated by many people. Bitcoin can be obtained through different ways, such as buying it from an exchange, accepting it in the form of payment, and mining it.
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