AHMEDABAD: A press release by the Reserve Bank of India, dated December 24, 2013, cautioned the users, holders and traders of virtual currencies (VCs) including Bitcoin about potential financial, operational and security-related risks. According to independent studies, Indians hold over 35,000
bitcoins worth approximately Rs 100 crore. As the bubble of initial excitement over the novel and unregulated currency has fizzled out, the financial experts look at Bitcoins in new light.
Sanjeev Shah, a chartered accountant based in Vadodara, delivered a lecture 'Emerging crypto-currencies: Threat or Boon' at Ahmedabad Management Association (AMA) on Friday. Shah stressed on issues such as legality of the new currencies and its future.
"According to Indian laws, virtual currencies are not defined so far. While the US treats it as commodity, in India we don't know whether it is commodity, goods, securities or currency as each is regulated by a different law. The debate is still raging across the world on how to treat it. While it is not illegal per se, it carries non-legal financial risks as pointed out by the RBI. It poses issues such as, how to calculate tax on the incomes received on the investment or transactions that have taken place in non-physical currency," he said.
Shah said that the awareness at this point is required in the light of the recent incidents where investors have lost crores due to speculation and the recent raid by ED in the city. "It is still a concept in its nascent stage that has potential to mature. If the purchase is made out of legal funds and seller is properly identified, we may reduce the risk of illegal activities. Still, it should be opted only by those who understand online market, have high risk appetite and know the technology," he said.
bitcoins worth approximately Rs 100 crore. As the bubble of initial excitement over the novel and unregulated currency has fizzled out, the financial experts look at Bitcoins in new light.
Sanjeev Shah, a chartered accountant based in Vadodara, delivered a lecture 'Emerging crypto-currencies: Threat or Boon' at Ahmedabad Management Association (AMA) on Friday. Shah stressed on issues such as legality of the new currencies and its future.
"According to Indian laws, virtual currencies are not defined so far. While the US treats it as commodity, in India we don't know whether it is commodity, goods, securities or currency as each is regulated by a different law. The debate is still raging across the world on how to treat it. While it is not illegal per se, it carries non-legal financial risks as pointed out by the RBI. It poses issues such as, how to calculate tax on the incomes received on the investment or transactions that have taken place in non-physical currency," he said.
Shah said that the awareness at this point is required in the light of the recent incidents where investors have lost crores due to speculation and the recent raid by ED in the city. "It is still a concept in its nascent stage that has potential to mature. If the purchase is made out of legal funds and seller is properly identified, we may reduce the risk of illegal activities. Still, it should be opted only by those who understand online market, have high risk appetite and know the technology," he said.
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