Thursday, September 29, 2022

Amid Government’s Warning, Indian Startups Show Interest In Crypto Payment

Initially, Bitcoin and other cryptocurrencies were being used as an asset class investment to earn profit. However, along with the time, many businesses around the world started accepting these digital assets as payments. A recent example of this is Tesla, a company that announced accepting crypto payments for the purchase of its electronic car. But a few months later, the company stopped that service, citing the environmental concern. 

Nevertheless, the company’s CEO Elon Musk has stated that very soon, the customers would again be able to buy Tesla’s car using cryptos.

Other than Tesla, other multi-national companies like Microsoft, Coca Cola and AXA Insurance are willing to accept crypto payments for selected services and products in a few territories. 

In India, despite the government’s heavy resistance, digital assets have been able to gain so much popularity. Now, while expanding its usage in the country, one of the local start-ups announced to accept crypto payments for its services.

The Rug Republic, a homegrown decor brand, has decided to accept the top 20 cryptos in the market as payment for its products. It is to be noted this service will only be available for Indian customers.

Cryptos have never been legal or illegal in India, but due to their decentralized nature, the RBI asked the banks to stop offering their services to the crypto exchanges. Following that, other government agencies in the country also started strengthening their noose over crypto-related activities.

The major concern of government agencies regarding cryptocurrency is that blockchain networks, on which the digital assets are based, would lead to tax evasion, terror funding or any other illegal activity. But many businesses in the country, that is somewhere involved with cryptocurrency, have started taking additional measures for tracing the transaction process.

“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 a certain currency on this date and at this price. Everything is absolutely above board,” said Raghav Gupta, Director at The Rug Republic.

Unlike many other countries, which regulate crypto-related activities, there are some sovereign nations like Nicaragua and El Salvador, those embrace cryptocurrencies. 

El Salvador even became the very first country around the world that has adopted Bitcoin as a legal tender. 

Gupta has specified that his company would not be accepting crypto payments from a customer residing outside India because that kind of transaction could be a violation of the Foreign Exchange Management Act (FEMA). 

Many people think why did Gupta start accepting Bitcoin payment, is it a publicity stunt or something else. One of the promoters states that Gupta believes ‘very soon the cryptocurrency will become prominent in India.’

“It is clear that not even 5 percent of my revenue will come from it. I am extremely bullish on it on 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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