Bitcoin Forum

Hi guys,

I am thinking of setting up a bitcoin exchange exclusively for Indians. Still working out the legalities of this. However, there are two options. Need your suggestions:

1. We will sell/buy BTC directly from users.
2. We will act as an exchange like MTGOX and act as an intermediary between the users.

Please point me to the right information for setting up something like this.
The idea is to make it easier to buy and sell bitcoins in India. Apparently it is easy to obtain bitcoins here but quite difficult to get rid of them.

Regards

The legality states that only Banking companies can accept cash deposits.
This is why a system like Mt Gox is not yet possible in India unless you can obtain a Banking/MSB licence.

With Brick and Mortar establishments being the weakest link in the Bitcoin economy, Anything centralized will be stopped by the authorities.

Getting rid of them will become easier in a few years for sure. Bitcoin is not a short-term plan for India.

In the mean-time, if someone can work around cash based pre-paid cards(Regulated as well) as a way to purchase them and get money from point A-B, That may be the low hanging fruit for India.

http://bensonsamuel.com/bitcoin-3/reserve-bank-of-india-regulations-on-bitcoin-in-india/

Also check out localbitcoins.com

Mt Gox is not an intermediary, they make a cut and accept deposits, which get them into quasi-banking.

You could also look at a few monetary systems like Ripple or Hawla.

http://bensonsamuel.com/bitcoin-3/a-decentralized-monetary-system-for-a-decentralized-currency/

A good idea. Hope we see an exchange soon. Are all the bitcoiners from Bangalore here? (I know at least 3 are  ;D)

What i could advice you is become a escrow you could deposit money from the buyer and when the buyer receives the bitcoins you can release the funds to the sellers and work around with mt gox exchange rate..

I have been fortunte enought to have hosted escrow for a few transactions.

There is tremendous scope in Escrow.

We need to start spreading a bit more.. Maybe we should target Bitcoin in Mysore as well.

I like this idea , i know we have no exchange in India yet , i am from delhi and looking for options to get a basic  exchange setup  here.  may be we  all can network together and  see if we can do  some thing about it,  i have been looking at the indian law  , the law  seems to  be regulating currency and payment systems  issued by a country or a specific company, payment system  regarding  credit cards and  payment system  like  the ones  created by pay pals.  but with bit coin it is decentralized not  issued by any  particular  person or government, i believe that the Indian government would not have any jurisdictional authority,  if we look  at the sale and purchase of  bitcoine as a product rather than a mode of currency , what the  person  does  after the purchase  will be his responsibility,
Another  added  bonus is that all  bit coin transaction is in the public domaine and  if the government cries that they cant know that  transaction happens then  our  response  would be to have them  pull up the transaction records  and connect the dots them self. 


Guys tel me what you think of this , and  do pm and lets see what we can  build.

An exchange for India is currently being built.

I am not sure about recent developments, but have been told that its release is not too far away.

Do you know who are doing this . and what market penetration they are focusing on.

I know who is working on it, but not aware of any more details.

The project is still at a nascent stage.

ermm.. sooo Who is working on it?
Or is this information confidential? in which case nevermind.

well if any one wants to start a collaboration to setup a system, which would work for bitcoin lets start to discuss and have a model created, we can in a few month role it out and test it, if that model works then will be good if it has any fault  we can modify the model and try to see if other things would be required to make it work. remember the economy and social interaction in india is very different we need to incorporate, the digital with the physical.

I will check with him if he can come on to the forum and post about it.

He had requested that no further information about this project be shared from my side.

This is very interesting.
Thanks benson!

I would at least like to know an approximate ETA for such an exchange, if nothing else.

It will be ready during the first half of next year.

It is currently at a POC state.

Hi,

I was introduuced to bitcoin by a friend in an MMORPG I play. Was interested in looking at it's status in India. Looks like things are in a nascent stage. I have been exposed to a few projects which could have easily incorporated a bitcoin kind of system in them. If someone is setting up an exchange in India, I would love to be updated about it. If there is some help that is needed let me know. I'm sure as a community, we can set up different aspects, right from the exchange to a market place to kick off this thing in India.

Just a quick question. Does anyone have an estimate of the bitcoins that are traded by Indians or in India? A ball park figure would suffice.

Banking/MSB licence.

What would this cost in India ? I think the bitcoin community should go together and actually fund entities like this, it will spread bitcoin. When we have a problem working with the existing system, we should simply morph in with them. Banks are rejecting bitcoin business all the time, but if we own the bank, then we can't reject ourselves.

So, if it was established how much it would cost to get a Banking/MSB license, it could be crowdfunded.

I might actually have a solution around the licence part. But for that I need certain estimates of volumes. Need not be crowd funded cause the setup cost is low. But it would need volumes to justify it's existence to the authorities.

Do we need a Banking/ MSB (Not in India) license??

Cannot find the link, but I believe that Banking licenses are needed only for businesses holding deposits for over 7 days. (Would be cool if someone finds this link - was a document by RBI)

http://www.professionz.com/in/businesses-in-india/how-to-start-a-forex-business.html - Good read if anyone wants to take the forex route.


 

Estimating volumes would be a tad hard. It's very hard to do. For volume to grow, there must be a need for bitcoin trade, and people must take it up. Using selling points like it will never be frozen for 180 days like paypal, and selling it in to it-houses in India, should make sure that there's some uptake.

So I think the potantial is huge, after all there's 1 173 108 018 inhabitants in India...

Depends on how it is defined. RBI doesnot allow you to conduct foreign exchange transactions outside India directly. Even if it through your international credit/debit card. Most people dont know this but if it passes a certain volume you incur some penalty.

Within India for forex you will need a licence.

What is bitcoin classified as in India ?

most likely will be classified as a virtual currency. this is regulated by the rbi. .

but can't be too sure..

We are starting off.. will deal with regulations when they come up.

We should define it as a "product" or "commodity" of some sort, and list out points as to why it does not fit the description of a "virtual currency" (e.g., decentralized.. mined/produced all over the world ). then dealing with regulations should not be a problem, right?

Of course, unless the govt. want to have value added tax on it.

That's part of the solution. But not entirely. For bitcoin to work at fullpotential there has to be a currency component to it. Besides, as another poster mentioned, a product attracts value/sales tax and if this comes in, there could be a possible way for the government to try and tax/categorize inflow of bitcoins.

Having spoken to 2 NGO's in the last few weeks to accept Bitcoin, their fear seems to be in the taxation.

Here is my simple solution:
Use 1 single signed address for any transactions to that organization. This will enable easy accounting for that firm.

The Exchange problem will be sorted quite soon, so that should not be a reason not to adopt Bitcoin.

Also talking to a lawyer/hacktivist in Bangalore - He has agreed to do the legal workup for Bitcoin in India, but says that it will take a lot of time. I will be spending more time with them in 2013 to get more documentation ready for Bitcoin.

He mentioned that on a small scale, Bitcoin will not create much confusion and can be used in closed circles.

What about selecting the non-fear route?

Just start, just get started trading, and then in parallel look into the legalities. Then, if someone complains, you could just point to that you're working with lawyers.

Also, there's a lot of people in India, will there be anyone in the govt. that has resources to have an eye on you at all ?

Yeah, thats the plan for now.

No one will look at us till something ugly happens.. lol

I think for exchange there is no volume in India. Something like spendbitcoins.com can quite functional.

Anyone who wants to process Bitcoins - INR is a sorted problem.

IndiaBitcoin.com and Bitpay have partnered, so this is half a problem gone.

good to know, but how it done practically, I got blank page on http://www.indiabitcoin.com/

I presume you have some processing form from bitpay on your website and when somebody pay you get money via bank from bitpay and then pay to guy who sell bitcoins to you.  well ... have you been down that road already. Recently usd transactions become requiring clearance before it can be credited. I have such transaction from MtGox already for 2 weeks still under clearance and not credited to my account. If you have current account on company then it is even worse, every transaction goes under scrutiny of your bank Forex department and have to be explained before it will be credited. The situation here is getting complete ...t
Only way I see as workable to get money from foreign exchanges is debit cards with IBAN.

Website is not yet in place for IndiaBitcoin, but they have partnered.

https://bitpay.com/bitcoin-integration-partners

 integrating payment tools for merchants, but where is merchants. just another born dead project.

it takes 20 minutes to integrate bitpay into prestashop.

They not only integrate, but also process the payments.

Everything must start somewhere. If you want to start to make bitcoin grown i a country where it is not very known, you just have to start, talk to people you think may be interested, and go on from there. Credit cards were at one point something new that nobody used, and before that even a paper bill was something new that nobody used. Everything starts with an idea, then it builds from there. If everyone always dismissed something as dead from the get go, then nothing would ever change.

Keep working hard to advance bitcoin!

Well said Herodes

I once read the story about the brothers Orville and Wilbur Wright. For those uninformed, they invented the air-plane.

http://en.wikipedia.org/wiki/Wright_brothers for some more information.

Needless to say, few if any believed in what they were doing. Actually they were considered more as lunatics, even their own father said it was completely impossible to make an airplane fly.

They studied how sea gulls where glide flying and, so they wanted to create something similar, with propells attached to it.

They faced a lot of obstacles, but kept on pressing. Finally they had a plane that actually worked for short distances. Their father was a witness to one of their first flights, and he took of his hat, and his mouth was wide open.  His sons had made it.

Believing is the first step in doing anything. If you don't believe you can make it, you can't.

As we all know, aviation has advanced greatly since that time, not to mention what impact it has on the world.

It's not impossible that in maybe some decades that everyone will laugh about the fact that bitcoin was something that wasn't something that could succeed.

When you read something like this, https://bitcoinfoundation.org/blog/?p=63 , it's very clear that the banking system as it exists is hugely inefficient. Bitcoin or some similar technology could be the answer. Personally I think the market will embrace bitcoin once they see how agile and efficient it is.

well, what kind of payments, bitpay processing payments for traders who want to accept bitcoins, do we have such traders in India. Indian trader with hands full of bitcoins and long troubled road ahead, till he get his INRs. Try to convince someone, and good luck with it.

That is where IndiaBitcoin converts the bitcoin to inr and pays out.

sorry, I may sound just too pessimistic. If they will come with something real I will be first to participate.

If you have a business in India that needs Bitcoin processing, let me know.

We have started work on this, just a few corners to be ironed out.

can you process some bitcoins for me.

imo it is a bit of short coming to think of bitcoins business in India on Indian terms only. Think of it as global enterprise. There is possibility for forex traders to open account in usd. Dollars credited on such account remains dollars. Such account opens opportunity to run global exchange. Also registering trust and opening account on Mauritius for example can provide similar opportunity. Indian business community very conservative in their way of handling money and bitcoins would be at the bottom of the list 'whom I trust with my money".

There will always be someone that's innovative.

I agree! Bitcoin is not for everyone in India yet!

Bit there is that penultimate clause in Bitcoin that ensures that every person on the planet 'Will be able to use it'.

It is nothing more a matter of convenience rather than individualism in India Inc..

Did anyone of you checked http://rbitco.in. It is an Indian company coming with a lot of features for bitcoin transactions.

Maybe you should work with Opencoin to offer a trusted Gateway.  It would be cool to add a INR credit/debit Gateway.

what is those " lot of features" I tried to press "how it works" and it did not work. hardly reassuring. So, you really think you can make some money on bitcoins in India. here already been few guys around who can make much better websites or even made a full functional exchange and they are gone already. good luck!!

The website does need a bit of work, but if it works, it will be a darn good alternative to what we have now!

Am not holding my breath though. Localbitoins seems to be doing quite well with linking bank accounts.

ZipZap has been looking for partners in India, this could be a great way to ease buying and selling online.

Last year more than 70 billion USD was remitted into India and the banks that have done these transactions have walked off with a COOL ABOVE ONE PERCENT.The BITCOIN community in India must integrate with the MAINSTREAM ECONOMY.There is NO NEED to create aBitcoin exchange in India, because  dozens of local exchanges are already operating.The practical utility of Bitcoin would be enhanced if thousands of merchants accept this method of payment.   Right now what is required is an agency to integrate the local bitcoin exchanges into a NATIONAL BITCOIN EXCHANGE which stocks the fiat currencies like $, £ ,€ ,¥ and other currencies and convert them to BITCOINS. As the fiat currency market is more than 95% of the mainstream economy, the BITCOIN COMMUNITY must  give incentives and discount coupons to merchants acepting BTC payment .BITCOIN's ENEMY No-1 in India  are the bankers and financial instiutions whose survival is threatened by the BITCOIN MOVEMENT.  I am planning to come out with some Discount Coupons to boost the bussiness of commercial establishments in BANGALORE CITY.

Sorry, not to join this discussion on time. I was sick with fever and was in the bed for quite some time.

I am setting up an exchange for escrow and delivery of bitcoins locally in India. The portal is up and running http://rbitco.in.

Today I am just closing in with this, still not well fully. I will join with more inputs soon.

I wish you get well NilamDoc.

Welcome  luckyindia, awesome ideas. As someone said India land of ideas, but America land of opportunities.

And now, we have Bitcoin to bridge the gap between ideas and opportunity. :)

Hey NilamDoc. Wish you all the best for rbitco.in...
Can you add details about the market depth/orderbook on the site?

Great to have an exchange in INR. We are waiting for this for a long time. We need many more such exchanges before bitcoin can successfully take off in India.

Benson was talking of a system of Pre-paid cards to move money from point A to point  B...I have come out with 50 milligram gold cards  costing approximately Rs.195/- and  half gram silver card costing Rs.40/- and one gram silver card costing Rs.70/-...These cards are the same size as that of a credit card or a debit card. PLEASE GIVE UR IDEAS to establish a BTC compatible GOLD EXCHANGE.My proposals are:
1)  Trading of gold n silver cards will take place online everyday from 10 am to 3 pm.
2)  The buy/ sell price for all Indian Cities will be quoted with a difference of Re.1/- to enable profits to the exchange.
3)  Friday evening settlement would be made and physical delivery of gold/silver would be given to participants.
4) Monday to Friday trading will take place online.
 ANY SUGGESTIONS, IDEAS PLEASE TELL