The Indian government recently announced that it is in favor of regulating bitcoin. A task force is being set up to provide recommendations. Bitcoin.com spoke with the CEO and co-founder of bitcoin exchange Unocoin, Sathvik Vishwanath, to find out the effect this decision has on Bitcoin adoption in India.
India in Favor of Regulating Bitcoin
In order to decide whether to regulate bitcoin, the Indian government set up a committee in April to evaluate the situation and provide recommendations. The finance ministry also asked for public comments, most of which are in favor of legalizing and regulating bitcoin.
On Tuesday, CNBC aired a news segment announcing that the most of the committee members are in favor of regulating bitcoin. Bitcoin.com interviewed Sandeep Goenka, co-founder of the bitcoin exchange Zebpay, prior to this announcement. He clarified that a task force is being set up and it would take about 6 months for them to come up with recommendations.
Unocoin CEO Sathvik Vishwanath has since agreed, confirming that it would take a while for the recommendations to be finalized. Prior to asking for public opinions, the government met with him and other Bitcoin businesses in a “closed door meeting” to discuss bitcoin regulation. While the committee is supposed to deliver a report next month, Vishwanath told Bitcoin.com that “things with Indian government move quite slowly and Bitcoin may not be on their priority list,” adding that:
It would be amazing to see if they come up with the report in 1 month but this will still be a recommendation and not the government decision.
Bitcoin’s Popularity in India
Meanwhile, the public response to the news of Indian bitcoin regulation has been very swift and positive, adding to the momentum that has knocked most bitcoin exchanges offline and has bitcoin’s price trading at a heavy premium. “The growth last month is something we could not handle and ended up with some backlogs and it took two extra weeks to clear up,” Vishwanath noted. “Other players in the market ended up not accepting new users temporarily to clear the backlogs.”
He described the customer growth he is seeing on his exchange as “like a hockey stick curve.” He believes the growth will continue, telling Bitcoin.com that:
Now that the government committee has given out a positive vibe regarding bitcoin, there could be even more new customers flocking around. Undoubtedly, this has been the most exciting time for bitcoin in India.
Vishwanath explained that there is a high demand from bitcoiners, but merchant adoption is still small. While there are still “not too many” vendors that accept bitcoin, he said:
We are able to sign up about 20-30 merchants per month to accept bitcoin lately. Our merchant base is quite vast and it spans from flight and bus ticket agents, books and cds merchants, saloons, server space rentals to e-retail merchant vouchers at discounts.
Nonetheless, even while “trading activities are quite picking up” and merchants are continually signing up, he noted that merchant adoption has slowed “as there is both regulatory uncertainty and high transaction fee for bitcoin transactions.” In addition, “the transaction fee for bitcoin is playing an important role and pushing back the micro transactions.”