Bitcoin Bandi: Thousands stand to lose huge amounts

Investors can now only trade the cryptocurrency in foreign markets

Indore: The deadline, set by the Reserve Bank of India, for placing cryptocurrencies out of circulation in the country expired on July 5. This means that now the investors still having bitcoin or any other cryptocurrency cannot trade it in India. The number of such investors may run into tens of thousands. In Madhya Pradesh alone, the number of such investors is estimated to be around 5,000. Due to the ban, the price of one bitcoin has fallen from Rs 14 lakh to Rs 4.33 lakh over the past three months. More than 20 lakh persons owned bitcoin wallets in the country in April 2018, up from 4 lakh in November 2017.

Price shoots through the roof

Bitcoins had come into being in 2009. At that time, the trading rate was Rs 900 for one bitcoin. However, the price soon began spiralling and climbed to a whopping Rs 14 lakh, turning many investors multi-millionaires overnight. The government’s ambivalent stand on the validity of the currency also contributed to the sharp rise in the price of bitcoins.

RBI plays spoilsport

Then, the Reserve Bank of India (RBI), on April 6, banned the commercial banks from having business relations with the entities that deal in virtual currencies. They were instructed to end the relations (if any) within three months. “The investment in digital currency for speculative purposes can adversely impact market integrity, and if they grow in their critical size, they can endanger financial stability,” the RBI said. The Central Bank said that no bank, non-banking financial institution, mobile wallet or pay bank will be allowed to covert bitcoins into rupees after the expiry of the deadline of July 5.

Following the government’s tough stance and realising that a rethink on the ban was unlikely, three major Indian companies dealing in bitcoins – Zebpay, Coinsecure and Unocoin – closed their operations. Earlier, anyone could create a bitcoin wallet on the websites of these companies and buy or sell the most popular cryptocurrency.

Those still owning bitcoins can now only sell them in markets abroad, where the currency is still valid. However, this is easier said than done.

(Story: Deepesh Sharma)

Show More