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Abu Dhabi, UAEThursday 20 September 2018

Wary Indian government spurs digital currency interest

"The fact that they keep sending out warnings and don't actually ban it, implies that they are studying it"

Cryptocurrencies such as bitcoin have aroused much interest in India in part due to official warnings about them. Chris Ratcliffe/Bloomberg
Cryptocurrencies such as bitcoin have aroused much interest in India in part due to official warnings about them. Chris Ratcliffe/Bloomberg

Vishal Gupta, the co-founder of the Digital Assets and Blockchain Foundation of India and the chief executive of Searchtrade.com, a search platform that allows its users to own keywords and earn in bitcoin, talks to The National about the rise of digital currencies in India.

What is really driving the interest in cryptocurrencies in India?

One is technology driven and the other is simple investor greed. On the one side you you have businesses and people on the technology side who understand the value proposition of the technology and what it can potentially achieve. Blockchain is trying to decentralise institutions of record-keeping. Blockchain makes it possible for people to keep their own records. The people who understand technology are very excited about this.

And what about the investor greed you mention?

It's not necessarily an India-specific case. It's created a lot of investor appetite because people keep seeing the rise in the prices of various cryptocurrencies including bitcoin, so it's caught the larger public attention.

What attracted to you to bitcoin?

Back in 2011, my friend started posting on Facebook about bitcoin and I was curious and in the end I thought there was some value proposition there. It's an unstoppable force. When you talk about building a digital future for India, cryptocurrency needs to be part of the mix.

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Have you bought bitcoins?

To be very frank, I've never invested a penny in bitcoin. I've earned my bitcoins, for example by offering software solutions for bitcoin businesses.

Do you think that the Indian government might ban cryptocurrencies?

I think if they needed to ban it, they would have banned it already. The fact that they keep sending out warnings and don't actually ban it, implies that they are studying it. I have been in touch with a lot of government quarters here and essentially it's a dilemma. Governments are used to traditional methods where you have one company or institution in charge of something and then you regulate or control them. Here the issue is the network of bitcoin is not owned by an individual, so enforcing any legality is not easy. I think in India what is likely to happen is that exchanges will be regulated under some body.

Why is the Indian government quite wary at the moment?

The government is not wary of the technology. The government is wary of the investor sentiment because what has happened is that a lot of people have created scam coins. Ill-informed investors fall into that trap.

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