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polynesia (OP)
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July 25, 2014, 03:40:33 PM
 #1

How would capital controls work in the bitcoin era?

Right now, we have restrictions on how much FX an individual can transfer out of India. Since banks and authorized forex dealers are about the only way a person can procure FX, the government is able to monitor this.

Once bitcoins are easily available, what prevents a person from buying BTC and sending them across to another person outside India. Would you need an established and trusted 'hawala' operator to transfer funds outside India?
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July 25, 2014, 04:56:28 PM
 #2

How would capital controls work in the bitcoin era?

Right now, we have restrictions on how much FX an individual can transfer out of India. Since banks and authorized forex dealers are about the only way a person can procure FX, the government is able to monitor this.

Once bitcoins are easily available, what prevents a person from buying BTC and sending them across to another person outside India. Would you need an established and trusted 'hawala' operator to transfer funds outside India?

To put it mildly Bitcoin is a Internet currency, no borders no central control.  So no Capital control.

Countries will have to adapt to the change in this environment.

They will no longer be in control.

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July 25, 2014, 08:54:41 PM
 #3

lol....n thats what they are afraid of  Grin

The only tap comes in my mind is that world regulatory authorities keep a close tab on the wallet companies.
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July 25, 2014, 11:16:36 PM
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lol....n thats what they are afraid of  Grin

The only tap comes in my mind is that world regulatory authorities keep a close tab on the wallet companies.

Do u mean, IMF, World Bank are going to regulate blockchain.info and coinbase.com ? Grin

polynesia (OP)
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July 26, 2014, 01:41:15 AM
 #5

My worry is that they will look suspiciously at places where BTC is traded for INR - the exchanges.

This could be their view
Sellers of BTC - Possible money launders
Buyers of BTC - Possible hawala operators
Operators of Exchanges - Possible facilitators of illegal transactions
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July 26, 2014, 02:27:09 AM
 #6

One approach that is open to them is to regulate exchanges in India and track the addresses from there on the Blockchain
If stuff has been moved on the Blockchain in a FY, you may have to explain the movement to IT
But yes not easy to regulate

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polynesia (OP)
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July 26, 2014, 05:08:48 AM
 #7

Yes, their first point of regulation will be the exchanges.
Which is why exchanges will have a heavy compliance burden.
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July 26, 2014, 10:01:35 AM
 #8

In a country like India where corruption is wide spread, and black money is an issue, Its gonna be hard for authorities to consider bitcoin as an option unless they try to understand what exactly it is and how it can help minimize above mentioned activities.
 The reason behind most of the exchanges asks for your ID is avoid any conflict with govs sooner or later if the person found indulged in any tainted activity. We all know what happened with Liberty reserve last year same can happen to any exchange.
 

polynesia (OP)
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July 26, 2014, 01:44:17 PM
 #9

In a country like India where corruption is wide spread, and black money is an issue, Its gonna be hard for authorities to consider bitcoin as an option unless they try to understand what exactly it is and how it can help minimize above mentioned activities.
 The reason behind most of the exchanges asks for your ID is avoid any conflict with govs sooner or later if the person found indulged in any tainted activity. We all know what happened with Liberty reserve last year same can happen to any exchange.
 

At some point, I predict our tech-savvy, corrupt politicians will start using bitcoins. Cheesy (if they haven't discovered it already)
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July 26, 2014, 01:53:22 PM
 #10

In a country like India where corruption is wide spread, and black money is an issue, Its gonna be hard for authorities to consider bitcoin as an option unless they try to understand what exactly it is and how it can help minimize above mentioned activities.
 The reason behind most of the exchanges asks for your ID is avoid any conflict with govs sooner or later if the person found indulged in any tainted activity. We all know what happened with Liberty reserve last year same can happen to any exchange.
 

At some point, I predict our tech-savvy, corrupt politicians will start using bitcoins. Cheesy (if they haven't discovered it already)

You would be surprised :-) trust me .
Benson Samuel
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July 26, 2014, 02:12:33 PM
 #11

In a country like India where corruption is wide spread, and black money is an issue, Its gonna be hard for authorities to consider bitcoin as an option unless they try to understand what exactly it is and how it can help minimize above mentioned activities.
 The reason behind most of the exchanges asks for your ID is avoid any conflict with govs sooner or later if the person found indulged in any tainted activity. We all know what happened with Liberty reserve last year same can happen to any exchange.
 

At some point, I predict our tech-savvy, corrupt politicians will start using bitcoins. Cheesy (if they haven't discovered it already)

You would be surprised :-) trust me .

Smiley

rohnearner
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July 26, 2014, 02:54:13 PM
 #12

In a country like India where corruption is wide spread, and black money is an issue, Its gonna be hard for authorities to consider bitcoin as an option unless they try to understand what exactly it is and how it can help minimize above mentioned activities.
 The reason behind most of the exchanges asks for your ID is avoid any conflict with govs sooner or later if the person found indulged in any tainted activity. We all know what happened with Liberty reserve last year same can happen to any exchange.
 

At some point, I predict our tech-savvy, corrupt politicians will start using bitcoins. Cheesy (if they haven't discovered it already)
Who knows tomorrow you'll get up in morning and there will be a breaking news on every news channel that someone like A. Raja get caught accepting bitcoins in some string operation. 

BitCoinDream
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July 26, 2014, 03:09:33 PM
 #13

In a country like India where corruption is wide spread, and black money is an issue, Its gonna be hard for authorities to consider bitcoin as an option unless they try to understand what exactly it is and how it can help minimize above mentioned activities.
 The reason behind most of the exchanges asks for your ID is avoid any conflict with govs sooner or later if the person found indulged in any tainted activity. We all know what happened with Liberty reserve last year same can happen to any exchange.
 

At some point, I predict our tech-savvy, corrupt politicians will start using bitcoins. Cheesy (if they haven't discovered it already)
Who knows tomorrow you'll get up in morning and there will be a breaking news on every news channel that someone like A. Raja get caught accepting bitcoins in some string operation. 

That chap is already in jail. Please dont overload him with more allegations Tongue

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July 26, 2014, 03:45:27 PM
 #14

In a country like India where corruption is wide spread, and black money is an issue, Its gonna be hard for authorities to consider bitcoin as an option unless they try to understand what exactly it is and how it can help minimize above mentioned activities.
 The reason behind most of the exchanges asks for your ID is avoid any conflict with govs sooner or later if the person found indulged in any tainted activity. We all know what happened with Liberty reserve last year same can happen to any exchange.
 

At some point, I predict our tech-savvy, corrupt politicians will start using bitcoins. Cheesy (if they haven't discovered it already)

You would be surprised :-) trust me .

I would like to know too Wink
polynesia (OP)
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July 27, 2014, 12:34:18 AM
 #15

We still hear of recovery of gold/cash from politicians.
That is why I assumed they are not into bitcoins.  Grin

Some of the big scams are larger than bitcoin's market cap. So if pay-offs in one of these scams gets denominated in BTC, you know what could happen. Tongue
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July 27, 2014, 08:22:17 AM
 #16

We still hear of recovery of gold/cash from politicians.
That is why I assumed they are not into bitcoins.  Grin

Some of the big scams are larger than bitcoin's market cap. So if pay-offs in one of these scams gets denominated in BTC, you know what could happen. Tongue
haha that would really take bitcoin to the moon first and then drag it down to the hell.
but sooner or later I believe we will see this happening for sure. just keep an eye.

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July 27, 2014, 10:22:49 AM
 #17

This is definately going to happen if the current goverment is really serious in passing the legislation and signing a treaty to bring back the black money, then I really see use of bitcoin by corrupt politician to hawala their funds. This is actually the real concern and which will also happen. The problem is if these corrupt bureaucrats take the bitcoin route then they will benefit and the community will really suffer at large, because on incident is going to start the fall of bitcoin dominos.
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July 27, 2014, 11:06:21 AM
 #18

This is definately going to happen if the current goverment is really serious in passing the legislation and signing a treaty to bring back the black money, then I really see use of bitcoin by corrupt politician to hawala their funds. This is actually the real concern and which will also happen. The problem is if these corrupt bureaucrats take the bitcoin route then they will benefit and the community will really suffer at large, because on incident is going to start the fall of bitcoin dominos.

This is the way to go for politicians right now. At least until there is some form of regulation of the exchanges operating out of India IMHO.

polynesia (OP)
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July 27, 2014, 12:08:49 PM
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This is definately going to happen if the current goverment is really serious in passing the legislation and signing a treaty to bring back the black money, then I really see use of bitcoin by corrupt politician to hawala their funds. This is actually the real concern and which will also happen. The problem is if these corrupt bureaucrats take the bitcoin route then they will benefit and the community will really suffer at large, because on incident is going to start the fall of bitcoin dominos.

If this happens, there could be restrictions on the use of bitcoins in India. But I doubt if the overall value of bitcoin will get affected. You might have to scout for an overseas exchange to liquidate your bitcoin holdings.
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July 27, 2014, 01:23:37 PM
 #20

This is definately going to happen if the current goverment is really serious in passing the legislation and signing a treaty to bring back the black money, then I really see use of bitcoin by corrupt politician to hawala their funds. This is actually the real concern and which will also happen. The problem is if these corrupt bureaucrats take the bitcoin route then they will benefit and the community will really suffer at large, because on incident is going to start the fall of bitcoin dominos.

If this happens, there could be restrictions on the use of bitcoins in India. But I doubt if the overall value of bitcoin will get affected. You might have to scout for an overseas exchange to liquidate your bitcoin holdings.

I agree to Polynesia

Also to add the market depth is increasing for bitcoin and hence the rates are so stable even after FBI sale and Dell news. However to make a difference in the rate it will be too much of fund movement required.

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