NEW DELHI: Until now, Bitcoin as payment and other cryptocurrencies have been viewed primarily as an asset class in which to invest in order to profit from price appreciation. Despite government concerns, a Desi business begins accepting Bitcoin as payment.
Some businesses in the United States have begun to accept them Bitcoin as payment currencies. Tesla famously began accepting it before discontinuing it a few months later, citing environmental concerns. However, CEO Elon Musk has stated that they may accept it again in the near future.
Microsoft, Coca-Cola, and AXA Insurance have also indicated a willingness to accept Bitcoin as payment for certain services and products in certain territories.
In India, cryptocurrencies have yet to gain widespread acceptance due to strong opposition from the government and the Reserve Bank of India.
However, one Indian startup has decided to begin accepting cryptocurrency payments. One example is The Rug Republic, a homegrown décor brand. The Okhla, Delhi-based company said it would accept payments in the top 20 cryptocurrencies, but only from Indian customers.
In India, cryptocurrencies are neither legal nor illegal. Banks have recently begun to distance themselves from cryptocurrency exchanges, most likely at the request of the RBI. Other government agencies have also begun to tighten their grip on these tokens.
Their main concern is that the anonymity provided by the blockchain network, on which cryptocurrencies are based, will lead to tax evasion, terror funding, or any other nefarious activity. Businesses, on the other hand, are taking extra precautions to track where the money is coming from.
“It is a misconception that crypto transactions cannot be tracked. It is easily verifiable on the blockchain, as opposed to the incredibly difficult ways money can be hidden in the real world. As we have seen with so many people during the Panama Papers episodes. Our invoices clearly mention that money was taken in certain currency on this date and at this price. Everything is absolutely above board,” said Raghav Gupta, Director at The Rug Republic.
Some sovereign countries, including Nicaragua and El Salvador, have embraced cryptocurrencies, with the latter becoming the world’s first to accept Bitcoin as legal tender.
Gupta, who exports his products outside of India, stated that his company will not accept crypto payments outside of India because such transactions could violate the Foreign Exchange Management Act (FEMA) because they are cross-border payments in a currency not recognized by the RBI.
Is this some sort of publicity stunt? Why would he take such a risk if the rules governing cryptocurrencies are unclear? According to the promoter, these tokens will eventually gain popularity in India. And it will provide him with a solid asset base in a few years.
“It is clear that not even 5 per cent of my revenue will come from it. I am extremely bullish on it in a 5-10 year scale. I am very happy to take this risk. Ethereum will be much more valuable by then,” said Gupta.
Source: The Economics Times