Bitcoin, Cryptocurrency: You have more reasons to stay away from bitcoins, other cryptocurrencies

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Recently, Citibank te an email notification to its customers has said that its credit and debit cards cannot be used to purchase cryptocurrencies.

Following this, SBI Card has also cautioned customers against risks associated with bitcoin and other crypto-currencies and is te discussions with Visa and Mastercard to waterput a verbod on such transactions with the banks’ cards. With a customer base of overheen Five million, SBI Card is the 2nd largest credit card issuer ter India.

This would be te line with what is happening globally. Banks and other financial institutions te other countries have also taken similar precautionary measures since cryptocurrencies are very volatile and customers who purchase thesis virtual currencies using their credit cards may not be able to clear their dues if they are kasstuk hard by a price crash. Ter the US, Citigroup and others like Canap of America and JP Morgan Pursue have blocked cryptocurrency purchases via credit cards spil they are not willing to take the credit risk associated with it.

Two cryptocurrency exchanges – BTCXIndia and ETHEXIndia – said that they will halt trading on March Five. Members have bot asked to withdraw their money on or before March Four. Te an email notification to its members, BTCXIndia said that it will not accept deposits from investors with effect from January 1, 2018. This is another reason that should worry those already invested and also those looking at investing ter virtual currencies. The exchange reasoned that with the government discouraging crypto currency trading, it has “waterput our business under a loterijlot of stress and putting us ter a position where wij don’t feel that wij can proceed our business ter a professional manner any longer.”

Now, if you are not able to withdraw your money before the deadline, you will be te a pickle. With no redressal mechanism and regulator, who do you turn to get your money out?

You may argue that it is just two exchanges, but it is still a crimson signal that cannot be overlooked. It should be noted that ter December the tax department had surveyed a few exchanges to get information on investors and traders of cryptocurrencies, and BTCXIndia wasgoed one of them. If more exchanges feel the warmth due to the prying forearms of the tax department and the other powers that be, halting of trade by exchanges could be a trend that wij could see.

Te cryptocurrencies, price is determined solely on the ondergrond of request and supply, and speculation is what drives their price.

For example, bitcoins being the most popular crypto is most expensive, priced overheen $ 9,000 spil on February 26, 2018. Te April 2018, the bitcoin wasgoed priced at around $1,100 and within an year the price surged to overheen $9000 by February 2018.

On the books, income tax laws do not mention how cryptocurrency gains should be taxed. However, ter the latest past, not just the government has raided bitcoin exchanges but also issued about one lakh notices to people who have invested ter cryptocurrencies like Bitcoin and made profits without proclaiming thesis te their income tax comes back.

Government clearly voiced its reluctant stance on cryptocurrencies like bitcoins, etherum and so on when Finance Minister ter his budget speech said the government does not consider crypto-currencies legal tender or coin and will take all measures to eliminate use of thesis crypto-assets te financing illegitimate activities or spil part of the payment system.

Reportedly, RBI warned banks about cryptocurrencies te January, telling them to step up scrutiny of financial transactions by companies and exchanges involved te the trade of bitcoins and similar digital tender. However, the apex bankgebouw is yet to announce such transactions illegal. The central bankgebouw has asked banks to understand how thesis currencies work before dealing with such companies.

Cryptocurrency exchanges require that a person signing up for a wallet with them accomplish KYC by providing his/hier Aadhaar, PAN and canap details. The turnaround time for KYC verification is different for different wallets. Sometimes it is done within a duo hours, ter some cases it takes a few days or even a month. Unnecessary to say, cryptocurrencies are very volatile. So, for very first time investors, the price difference, at the time when they sign up for the wallet and the time when they are able to buy after KYC approval, could be gigantic.

Bitcoin price on January 26, 2018 wasgoed $ 11,090.06 and on February Five, within Ten days it crashed to $ 6,941.26, and spil on February 26 it is $9,690.01.

Risk: Higher the volatility, greater is the risk.

Earlier for a long time, bitcoin wallets and cryptocurrency exchanges argued that the Indian government has not proclaimed virtual currencies ‘illegal’ and investors shouldn’t hesitate to invest. True, the status-quo resumes, but te the present screenplay buying and redemption are becoming major issues for investors. Therefore, considering thesis developments and the fact that te the absence of a regulator you cannot treatment anyone for redressal you should think twice before buying cryptocurrencies.

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