Bitcoin: A Tradable Asset or A Virtual Protected Property

23.07.2019

“Judgements, decisions, law enforcement are like a thread to a needle. You need them to sew dismantled things and put them together for further use.”- Rashi Aggarwal

But does Bitcoin and other cryptocurrency actually require amendments to make them legal for people to use?

It is quite weird to see countries, governments, and courts playing such a vital role for pushing out laws to hold, use, trade a currency which doesn’t even exist in the physical world. Nobody ever knew that a virtual currency can make the entire globe revolve with a world of decisions.

Supporters, opponents, advisers, and commenters, lakh(s) of opinions are taking the internet by storm.

In the news recently, came forward 3 major stories that itself define a mixture of views on cryptocurrencies.

But before we talk about what these news were and how did we analyse it, let’s talk about Bitcoin- The First ever Cryptocurrency.

As per World Economic Forum, Bitcoin or Cryptocurrency is a cryptographic methodology of transacting and assisting in financial tradings. In basic terms, that we understand Bitcoin simply say that this currency or any other cryptocurrency is not governed by a centralised entity and serve as a medium of transaction/ trade between two people in a payment or any other service.

The discussion over cryptocurrencies are lasting forever and don’t take a moment to halt. Today, there are over 2,000 cryptocurrencies and the number is increasing each day.

Cryptocurrencies may not be legalised in many countries around the globe, but have created a buzz on the internet with major decisions being taken by The Hangzhou Internet Court in China, which in a judgement on Thursday, 18 July 2019 has formally noted Bitcoin as virtual protected property.

The court said, “though Bitcoin mining and trading is still illegal in China, Bitcoin holds value as a property which is scarce, disposable, and legally protected by the laws of the People’s Republic of China.”

The entire episode took place because of a Bitcoin property infringement dispute between an online store Taobao and a plaintiff who had purchased 2.675 BTC for 20,000 yuan ($2,900) in 2013, who alleged the former of not sending any prior notice before shutting its operations in 2017.

The People’s Bank of China took restrictive measures in 2017 leading to the closure of all platforms trading, selling, or dealing with cryptocurrencies. It also included banning any private shops which provide services related to ICO in technological development, marketing and writing business proposition. The Act also extended prohibition on selling chips for crypto mining and mining remains.

Though China is not a crypto friendly country, and does not welcome crypto exchanges to operate with open arms, it has finally recognized Bitcoin in a positive way as a protected virtual currency. This judgement might not bring a positive flagship for trading in cryptos in the Asian country, but has surely widened the opportunities to hold these futuristic currencies.

Another Asian country, that has mixed reviews on digital currencies and their usage, is India. Time and again, we have heard the country’s government calling it a Ponzi Scheme, but does it really justify the actions?

The Indian Government has never backed the trading of cryptocurrencies in the country, neither have they given out a clear and final statement on the regulations for the digital currencies.

There are a lot of discussions that buzz around and a lot of questions that arise every now & then about the laws & regulations of cryptocurrencies.

Recently a supposed draft of regulations on cryptocurrencies was circulated on the microblogging website, Twitter, which had proposed a 10 year imprisonment for any person holding, mining, selling, trading and dealing in cryptocurrencies, leading to huge discussions, comments on the same. The draft also speculated a proposal of “Digital Rupee” which will be backed by the Reserve Bank of India.

Research work, project development stands barred from the proposed bill and stands legal according to the draft. Since the draft wasn’t introduced in the parliament or public lately, there are no confirmations on the complete ban of cryptocurrencies in India.

On the contrary, at a session in the Parliament, the Minister of State for Finance, Anurag Singh Thakur broke his silence by answering a question asked by a Member of Parliament on regulations of cryptocurrencies in India “ there is no law specific to crypto to refer to. Cryptocurrency activities are reportedly only actionable offenses if they violate preexisting laws, which can be enforced by entities including the RBI, enforcement directorate, and income tax authorities.”

Amidst the positive judgements in China and mixed reviews in India, America stepped into the dramatic scene with the U.S President’s tweet which said “I’m not a fan of Bitcoin and other cryptocurrencies. Unregulated crypto assets can facilitate unlawful behaviour, including drug trade and other illegal activity. ”.

Soon after which the prices of cryptocurrencies dipped down before bouncing upward. There were also speculations about the tweet to not come from the president but his Treasury Department.

All over the world, there are different discussions and opinions that make a statement each day. There are countries that have accepted these currencies, invest and trade in these currencies. But there is still some space in the room to learn more about these futuristic currencies, their usage and the benefits that come with them.

Few countries are still finding a way to cope with cryptocurrencies and are taking steps to initiate the use of digital assets. Of course, cryptocurrencies are a good investment option, but are still in the running to hold the position in the market.

With the proposal of a “Digital Rupee” and the judgement of referring Bitcoin as a Virtual Protected Currency, India and China might push a positive signal among traders about cryptos getting legalised in near future. Whereas, clouds of confusion may hover around till any further announcements in India.

Banning cryptocurrency would hurt India more than it would “help” because this is a brand-new technology and a whole new industry to go along with it. The potential companies, jobs, and tax revenues are serious considerations for any government action against cryptocurrency. It may push an investor to pour in their investments through other channels which are not legal and it may promote bad practices.

South Korea accounts for 20% of global bitcoin transactions. However, Korea did not say they would ban cryptocurrency or the trading of. They simply said that they would begin enforcing AML/KYC rules with exchanges, they have recently banned anonymous cryptocurrency trading. It is imperative that Govt. organisations and regulators ponder about any decisions keeping in mind the economic repercussions.