India is one of the most sought after destination for Bitcoin businesses. The Bitcoin ecosystem in the country is still in its early stages with a handful of “desi-born” Bitcoin start-ups offering bitcoin exchange and trading services to the population. Just when we thought that everything is going well for the Indian Bitcoin ecosystem, we hear the news that one of the largest Bitcoin exchanges — BTCXIndia is about to shut down its operations.
BTCXIndia, a Hyderabad based Bitcoin company has displayed a notice on their website informing its users about the company shutting down its Bitcoin trading platform on May 20, 2015. According to the notice, BTCXIndia claims to be facing issues with their bankers. Their bank has apparently refused to service bitcoin businesses any longer, citing some policy. BTCXIndia’s further efforts to find an alternate bank hasn’t been successful for the same reasons.
Even though the central bank – The Reserve Bank of India hasn’t issued any explicit instructions to the banks to prevent them from working with Bitcoin businesses, many banks have themselves decided not to work with Bitcoin companies. The lack of regulations maybe one of the reasons for this stance against Bitcoin. On the other hand, this decision by the banks come as a surprise, especially after the Governor of RBI himself expressed his interest towards Bitcoin and its evolution.
BTCXIndia’s Bitcoin trading platform has been operational for a year now, since its launch in May 2014. The company has requested its customers to withdraw all their funds from the platform on or before May 20th. The company intends to resume operations once clear regulations are in place. Many banks in India are risk averse, which makes them think twice before working with any new technology or businesses.
Recently, the members of another Bitcoin company—Unocoin were also summoned by the concerned authorities in Bangalore to question about the company’s operations and to gain understanding of Bitcoin business.