the same in virtual currency without any cost.
They also claim that bitcoins being limited in supply - the algorithm allows only a certain amount of bitcoins to be “mined” or generated - is useful in fighting inflation and currency depreciation, calling the virtual currency "digital gold".
"Currently bitcoins bypass the banking system and hence drives it to black market and results in thriving illegal transactions," said Sunny Ray, director of business development at Buttercoin, a white label bitcoin exchange backed by funds, including Google Ventures, the investment arm of the internet giant Google. Ray added that unlike other illegal activities every bitcoin transaction can be traced and stored in millions of computers across the world. Buttercoin will be setting up a bitcoin exchange in the next couple of months in Mumbai with partners. He insists on getting a NBFC licence for running the exchange even though it is not a necessity currently in the country.
Globally, there are concerns of bitcoins being used as a money laundering channel. In October, the US government clamped down on Silk Road, an online marketplace that sold drugs for payments made in bitcoins.
"Anything can be used for illegal purposes. If RBI forms a framework, this will be one of the easiest systems out there that can be monitored by government agencies and there is no way one can destroy the trail of the currency," said Sathvik of CoinMonk.
The recognition itself is not driving people away from doing business in bitcoins. MadOverCoins helps people to buy physical goods from them in bitcoins.
Its CEO Vikram Nikkam has been doing this for six months with partners and buying the physical goods by paying in rupees, taxes duly paid. "The idea is to bring more users to the system. If I think about regulation that is going to come in future, I will not be able to do business today. That is a risk I am taking."