India expresses Bitcoin doubts but doesn’t make it illegal

Bitcoin traders aren’t having an easy time of things at the moment. In December, China outright rejected it as a legitimate form of currency. In January meanwhile, Canada confirmed that it didn’t view the crypto-currency as legal tender. Now India’s reserve bank (RBI) has joined the chorus of those expressing doubts about its legitimacy.

According to TechCrunch, the RBI’s Raghuram Rajan expressed concerns over who controls Bitcoin’s value.

Addressing a Mumbai tech conference, the bank’s governor said:

“As a currency, I do worry a little bit when the underlying (value) fluctuates tremendously. One of the values of a currency is stability and the extent (to which) a currency is target of speculation as opposed to primarily a means of exchange.”

“I do think we have to understand the role of virtual currencies and how they will interact with the paper currency that you have,” he added. “There are questions that need to be asked, one of them being, who will maintain value? Can we have confidence in unseen, unknown centres who maintain the value of the currency, or an algorithm that will maintain the value of the currency — we need more credibility there.”

The Indian ecommerce properties trading in Bitcoin nonetheless remain undeterred. Highkart founder Amit Kumar is particularly bullish on the virtual currency. “There’s nothing illegal in accepting Bitcoin — the RBI will take more time to come up with clarity,” he told TechCrunch.

While the Indian reserve bank currently has reservations about Bitcoin, it isn’t ruling the currency out as having a future in the country.

“I don’t want to say that there is no future for these virtual currencies, I think it’s a process of evolution, but for now all we’ve done is express the kinds of concerns we have about it, without determining in any which way what we intend to do,” Rajan said