This ad will close in

India's No. 1 Bitcoin Exchange: Shutdown 'In No Way' Reflects Bitcoin's True Potential

India's No. 1 Bitcoin Exchange: Shutdown 'In No Way' Reflects Bitcoin's True Potential
Image credit: indianexpress.com

Following a recent cautionary statement by the Reserve Bank of India directed at people who buy and sell digital currencies, India's largest Bitcoin exchange service has suspended its operation.

"This is being done to protect the interest of our customers and in no way is a reflection of Bitcoin's true potential or price," BuySellBitco.in said on its website. The trading platform was reportedly processing about 12 million rupees, or about $194,000, worth of Bitcoin transactions each month prior to the announcement.

The shutdown looks like a precautionary measure, one that will shield the service from potentially forthcoming legal restrictions on digital currency businesses. On Christmas Eve, India's central bank, which controls the nation's monetary policy, released a statement warning Indian citizens of the risks associated with virtual currencies, including price volatility, vulnerability to hackers and a lack of ability to resolve payment disputes. However, unlike China, India's government stopped short of banning financial institutions from handling Bitcoin-related transactions.

The Reserve Bank of India "is presently examining the issues associated with the usage, holding and trading of virtual currencies under the extant legal and regulatory framework of the country," Ajit Prasad, assistant general manager of the bank, said in the statement.

BuySellBitco.in isn't the only Bitcoin-related business in India to shut its doors following the central bank's advisory. Another trading platform, INRBTC, has also suspended its services indefinitely. Citing the fact that people who buy and sell digital currencies are "exposed both legal and financial risks," the exchange said on its website that "the only option left now is suspend the services until further arrangements can be made."

Just as China entered the Bitcoin market in a big way earlier this year -- with the platform BTC China, which is open only to Chinese users, becoming the world's largest in short order -- Indian interest in the digital currency has grown in recent months, allowing India-based Bitcoin exchanges to spring up. But now their future appears to be in doubt.

And yet Bitcoin is still the most valuable currency in the world. While down from the high of more than $1,200 that it reached last month, it remains well above $266, its previous high value before November.

At 11:43 a.m. EST, the exchange value of a bitcoin on San Francisco-based Coinbase, which allows deposits and withdrawals in U.S. dollars from users' bank accounts, was $732.

Related: Bitcoin Price Plummets After Chinese Exchange Bans Yuan Deposits

Brian Patrick Eha is a freelance journalist and former assistant editor at Entrepreneur.com. He is writing a book about the global phenomenon of Bitcoin for Portfolio, an imprint of Penguin Random House. It will be published in 2015.

Loading the player ...

The Next Big Thing: Embeddable Tech?

Ads by Google

Most Shared Stories

1
The 3 Attributes to Look for in Top Talent
2
5 Key Characteristics Every Entrepreneur Should Have
3
14 Books Every Entrepreneur Should Read in '14
4
Steve Jobs' 13 Most Inspiring Quotes
5
The 7 Books Every Entrepreneur Needs to Read When They're Discouraged

Trending Now