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bitcoin: Desi startup starts taking Bitcoin in payments despite govt warnings

bitcoin: Desi startup starts taking Bitcoin in payments despite govt warnings


NEW DELHI: Till now, Bitcoin and other cryptocurrencies are seen largely as an asset class to invest in to gain from price appreciation.

In the US, some businesses have also started accepting them as currencies for payments. Tesla famously started accepting it and then stopped it a few months back, citing environmental concerns. But CEO Elon Musk now says they may accept it again soon.

Microsoft, Coca Cola and AXA Insurance have also shown willingness to accept cryptocurrency as payment for select services and products in some territories.

In India, amid heavy resistance from the government and the Reserve Bank of India, cryptocurrencies are yet to gain a broader acceptance.

But one Indian startup has ventured out to start accepting cryptocurrencies for payments. The Rug Republic – a homegrown décor brand – is one. The Okhla, Delhi-based firm said it would accept top 20 cryptocurrencies for payments, but only from Indian customers.

Cryptocurrencies are neither legal, nor illegal in India. Lately, banks, likely on the insistence of RBI, have started disassociating from cryptocurrency exchanges. Other government agencies have also started tightening their noose against these tokens.

Their major concern is the anonymity that the blockchain network — the technology on which cryptocurrencies are based on — will lead to tax evasion, terror funding or any other nefarious activity. However, businesses are taking additional measures 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 such as Nicaragua and El Salvador have embraced cryptocurrencies, with the latter becoming the first country in the world to adopt Bitcoin as legal tender.

Gupta, who exports his products outside India as well, said his firm will not accept crypto payments outside India, as such transactions could be in violation of the Foreign Exchange Management Act (FEMA), as they constitute cross-border payments in a currency not recognised by RBI.

Is it a publicity stunt? Why else is he taking such a risk when the rules regarding cryptocurrencies are not clear? The promoter says he believes these tokens will eventually gain prominence in India. And, it will form a good asset base for him in some 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.



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