India's three largest bitcoin exchanges "band together" to respond to central bank warnings

Following last week’s warning from the Reserve Bank of India (RBI) against virtual currencies, including bitcoin, four bitcoin startups have formed an association to better communicate with regulators.

Zebpay, Unocoin, Coinsecure, three local bitcoin exchanges, and Singapore-based bitcoin company Searchtrade are registering the "Indian Blockchain & Virtual Currency Association." The four companies met for the first time in Mumbai last Friday, and one of the topics discussed by the association was the recent warning from the Reserve Bank of India against digital currencies.

“The association was formed last Friday but has not yet been officially registered,” Unocoin co-founder and CEO Sathvik Vishwanath told reporters.

He explained that the purpose of the four companies forming this new association is to enable the industry to achieve self-regulation and lobby regulators to regulate Bitcoin and blockchain technology. In addition, he added:

“The association will initially be open only to businesses, and then we may choose to open it up to individuals.”

In fact, as early as 2014, there was a Bitcoin Association in India, called the Bitcoin Alliance of India, but now it has disappeared. According to Mohit Kalra, CEO of Bitcoin exchange Coinsecure, the Bitcoin Alliance of India eventually failed because the scale of Bitcoin companies at that time was too small.

Saurabh Agarwal, co-founder of bitcoin exchange and wallet company Zebpay, told reporters, "We considered reviving the old association 'India Bitcoin Alliance', but the four founding companies decided to include blockchain companies in order to create a larger association."

RBI's warning

On February 1, the Reserve Bank of India issued a notice on digital currency on its official website, which read:

“RBI advises that the RBI has not authorized any organization or entity and has not issued any license for such scheme or operation of Bitcoin or any virtual currency. Therefore, any user, holder, trader, etc., while dealing in virtual currencies will be at his own risk.”

This latest notification also mentions an old notification issued by the Reserve Bank of India in December 2013.

While Bitcoin has never been banned in India, the industry has been curbed by the central bank’s warnings about several risks of digital currencies, including volatility, cyberattacks and the potential for use in illegal activities.

As of press time, the daily trading volume of the Indian rupee against Bitcoin is about 521 BTC. (Data from Coinhills) According to the website, the rupee is the 14th most active currency in Bitcoin trading. Data from the local Localbitcoins has shown that the volume of Bitcoin trading in the Indian market has increased.