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The Case Against Bitcoin & Crypto-Currency Barron's
Understanding the Petro Dollar, its possible decline, Fiat Currencies and how it all affects India and Why maybe it's time to look elsewhere to hold foreign reserves.
The whole thing came up recently during some discussions I had about why people use the dollar for international trade and what would happen if the major economies of the world just stopped using the Dollar. What is the Impact of BRICS. Why US has so many wars in the middle east and they are supposedly for oil but they never really take over any oil. How US is so rich to have 800 military bases around the world with a defence budget larger than the rest of the world combined. About why countries still hold US dollar reserves when US is in trillions of dollars of debt and being in so much debt, how is US economy still afloat? So I thought of putting it together here for myself and anyone else who may want to learn about this. Now, this is what I have gleaned from my reading on the matter. I am no economist so if anyone wants to correct me on anything, I would be welcome to accept the criticism with reference material substantiating your point. in 1944, all the countries entered into the Bretton Woods Agreement which basically said that all of the world’s currrecies would be backed by the US Dollar and the US dollar would be backed by gold and any country could convert their currency into US dollars and then redeem US gold in exchange for that at the rate of 35 dollars per ounce of gold. Since US had the largest gold reserves at the time (75% of the entire world's gold), everyone agreed. This also allowed US treasury to fix exchange rates of dollar into different currencies and set the interest rates for interbanking transactions etc. However, the multiple wars of the US during the ’60s caused domestic inflation in the US and the value of Dollar to fall. This caused panic in all the countries and they started redeeming gold from US treasury. The US gold fell from 20,000 tonnes to 8100 tonnes very quickly. Thus, in 1971, Nixon closed the gold window i.e. he suspended the ability of any nation to redeem US gold against dollars and took the gold backing off of the US Dollar. While that allowed US to retain its gold reserves, it made the need of the US dollar among other countries non existent. So everyone started to move away from the Dollar. After that, US economy started to spiral and the price of gold became 135 dollars per ounce. On top of that, the Arab world hiked the oil prices. Now, the US desperately needed to stabilize the spiral. So they brokered a deal with the Saudis that the oil producers would not only trade oil in nothing but US Dollars and convince the OPEC (the middle eastern, north African and other oil producing countries) to do the same but also invest their (OPEC’s) oil profits in US treasury by buying US Treasury bonds. This basically means that they (OPEC) are buying out US debt. Not only this, US is printing Dollars against the amount of Foreign investments in the US treasury which is made by Oil producing nations which are their oil profits. So basically, profits from every barrel sold by OPEC make way to the US treasury and become the value against which dollars is printed. Ultimately, more the profits in oil, stronger the dollar and lesser the profits in oil, weaker the dollar. Thus US gets a double benefit out of every barrel of oil in a way. In exchange the US would sell them (Saudis) advance weapons and all the gold they demanded. (So basically weapons and gold sale in exchange for trading oil in dollars props up US dollar. Gold is still propping up US dollar indirectly by forcing the oil producers to trade in dollars). Thus the petrodollar was born. This caused the world to need US dollar again. If you wanted to buy oil, you needed US dollar by either converting your currency or by selling stuff to the US. The latter is more preferred as it is cheaper than exchanging your currency and also grows your economy. So once again, US became the benchmark of international trade since no country can hope to grow its economy without using energy aka oil and you can’t have oil without US dollars. As long as all these countries need oil, US can just print Dollars out of thin air and balance it against oil barrels (as explained above) without actually even owning a single drop of oil. (Other countries need to own the gold that they balance their currency against). US does not need to control oil, they just need to control the currency it is traded in to keep their economy afloat. (more on that later in US foreign policy). Similarly, US bokered a deal with the Latin American countries to not only trade in the US Dollar but also to give precedence to US, EU and Japanese products in trade. So if more and more countries decide to shun the dollar and trade in other currencies, this would eventually cause OPEC to switch as well and Dollar could collapse. How? Well, US is basically just printing enormous amounts of money out of thin air. This money is being used domestically and to a much larger extent, globally. If international oil trade in dollar stops, people stop needing the dollar and use their own currency. So all the internationally circulating dollars would come back to US. Now that is just too many dollars against very little amount in the treasury and that would cause hyperinflation and economic spiral. However, the logical next step would be to just destroy the excess dollars coming in from abroad and that would keep the country’s economy afloat. While that is okay but remember, what is the dollar being printed against? The foreign investments in the treasury which are the profits from the oil trade in dollars. That would go away as well essentially leaving nothing in the treasury against which the dollar is valued. Hence dollar will literally not be worth the money it is printed on. Second, since US currency is basically a petrodollar, its power depends on the control of oil. So right now, whoever controls middle east has major power. Today, Saudi Arabia controls Middle East and US controls Saudi Arabia. US-Saudi brotherhood sort of makes it impossible for other countries to have an influence over this. Russia has tried for decades to establish a strong foothold in the middle east but has been unsuccessful. It has also dictated the US foreign policy far the last 5 decades. Like I said, US needs to control not the oil reserves but the currency oil is traded in. Hence all the wars we hear that were for oil, were not actually for oil per se but intimidation tactics against countries that announced that they would no longer accept dollar as a currency in international oil trade. Egs When the Ayatollah of Iran announced their intention to denounce dollars in oil trade and use their own currency instead, US backed Iraq to go to war with Iran and even provided the Weapons of mass destruction to use on Iran that they later used as an excuse to invade Iraq and prosecuted Saddam Hussein for. When Iraq invaded Kuwait ( a major producer of oil) to be able to pay their loans to Kuwait and then later asked for Euro to be used for oil trade rather than Petrodollar, US invaded Iraq. When Gaddafi asked gold based Dinar instead of US dollars for oil trade, US invaded Libya. When Chavez did the same, Us staged a coup in Venezuela. However, starting a non-petro currency would break this link and oil and Middle east would become less relevant for Economic power and only be of interest for energy concerns. It is still important but less so than a economic and geopolitical chessboard of US that it is today. It may actually be a solution to achieving peace in the middle east. However, another thing that happens is Middle East controls prices of oil which is tied to the Dollar. Recently, the Middle East (OPEC or basically Saudi Arabia) has decided to drop the international prices for their own economic reasons. Now, the countries that have oil production as a major source of revenue and trade in dollars eg many N African countries, Venezuela have seen their economy completely stabilise and destroyed. These countries are sick of US and Saudi controlling the markets in a way that affects other countries adversely. Hence, for these countries, switching to the international trading system of a gold based currency will cause their economies to stabilise. The international reserves of EU etc, on the other hand have seen increased holdings by the OPEC countries and have been worried of increasing power of these countries in the international banking system. They would be only to glad to get rid of these holdings. Now, non Dollar currency would cause a fall in the US dollar value. In lieu of that, here is another thing that needs to be considered. A lot of the developing countries have international trade deficits. Now these trade deficits can be in the currency of the country to whom the debt is owed or any other internationally accepted currency eg. the Dollar. If the debt is in dollars, the conversions and interest rates of borrowing are determined according to the rules of the US treasury. Again, the rates in the US treasury are linked to the value of dollar. Most countries giving out loans prefer to do so in dollars as historically the Dollar is strong and trusted not to collapse and hence the money they owe is safe. The countries taking loans also convert their debts to dollars as it is easier and the country to whom the debt is owed cannot just up and change the value of the debt owed by manipulating their currency as dollar has determined the conversion into other currencies at fixed rates, so it is safe for everyone. However, there is a slight problem with this. If you owe a debt of 1 dollar to someone, when you pay the debt, it will depend on the value of dollar to your currency at that particular instant. So if dollar has gotten stronger wrt to your currency, you shall have to pay more money and if the dollar has gotten weaker, you will owe less money in your currency. Hence the fall of the dollar would be beneficial for the countries who owe debt in dollars and bad for the countries who have loaned out debt in dollars. Also, taking debt in dollars becomes cheaper if the value of dollar falls since the US treasury interest rates are directly tied to dollars, hence it becomes cheaper to borrow in dollars. Also, as I said, if it grows weaker still, yo will owe less money. One more thing to consider regarding fall of the Dollar is this. Uptil now, the oil producers have been buying US treasury bonds due to the Bretton Woods deal. Other countries and US and other corporations do so too. Now, the US treasury gives a fixed rate of interest to those investing in the treasury. This rate, in turn is linked to the value of the dollar. Stronger the dollar, more the interest on US Treasury bonds and more the foreign countries invest in it. Now this means that these foreign countries would much rather invest their money in US Treasury at an assured fixed rate of interest than invest it in 3rd world countries and take a risk of maybe losing it. However, if the value of dollar were to fall, the countries would much rather draw out of the US treasury and invest more in the startups in different countries, domestically etc. The other side of the same coin would be the countries dependent on US investment. Should the value of the dollar fall, the investment being received from the US would be of a lesser value. On the other hand, there is one more thinh. Like I said, investments in dollars are governed by the US treasury rules. Now, basically, US banks have cut the taxes on money transfer and conversion, artificially keeping them very low to fuel the domestic and world trade etc . If the dollar were to collapse, people wouldn’t trade in dollars. They would trade in other currencies. The inetrbanking across the world would be then governed by the rules of the currency you trade in, for eg, BRICS nations will follow the tariffs etc of the Shanghai Bank where most of the reserves are held. So that effect would then depend on the rules of the bank you deal with and that can be detrimental or beneficial depending on the bank’s policies compared to the dollar. Also, countries having holdings in the US treasury would lose the entire value of their foreign reserves. On the other hand coountries like BRICS who have their reserves in other international banks would retain the value of their foreign reserves in those banks. What does this mean? Indian Currency would also fall with the fall of the dollar in its current state. Now, we usually run around with the perception that Indian currency is backed by gold, That’s not true. The truth is 99% of today’s currencies US Dollar, Euro, Indian rupee, all of them are fiat currencies i.e. their value is not determined by the gold they hold but by the economic strength of the government. Only an average of 4–7% of any country’s currency is today, backed by gold. US Dollar - 4.5%, Indian rupee - 5%. The rest is held in the terms of foreign reserves in other countries like in the form of US Dollar (around 70%) in US treasury bonds, in world bank or IMF, in other currencies (around 25%) in BRICS and other foreign reserves etc. Currently if you have rs 1000 , only rs 50 is gold, around 670 is held in the form of US dollars and Rs 280 in other currencies. You might ask why is that? Well, remember the Bretton Woods agreement. At that time US had 75% of the world’s gold which backed dollar and dollar backed other currencies so most of the currency of any country was backed directly or indirectly through dollar by gold. Now, it is difficult to keep gold in your country so it was convenient for other countries to just hold foreign reserves in dollars especially with the fixed exchange rates they provided. Hence more and more portion of their currency was being held in dollars. However, after Nixon shock of 1971, dollar removed its gold backing. So, automatically all other currencies that were backed by dollar (99% of the world currencies) also became fiat currencies as a result. However, the dollar was still good and trusted so no one thought much of it, especially since dollars were being printed out of thin air. However, now with the prospect of the trust in dollar fading, this as started to worry some experts. Because of the senseless printing of dollars and in exchange all the fiat currencies, the total amount of currency can nowhere near be compensated by the gold reserves even if all the gold in the world was put together. It would form not more than 10% of the currency in the world. Now, putting this disturbing detail aside, if Dollar were to collapse, 670 rupees of your 1000 would become worthless, too. So, it isn’t wise to hold US dollars, is it? No its, not and many countries have woken up to that fact. China has been secretly amassing large amounts of gold. OPEC countries have started removing their capital from US treasury. See, these oil producers have been receiving US gold in exchange for trading oil in US dollars and have accumulated holdings in other countries’ treasuries. Now with all the crazy gold they have received they have bought material assets like real estate etc even in other countries. Now, they can simply sell out their US treasury bonds and buy more assets such as gold and real estate from it, which they have been doing in the recent years. Now, this will start depleting the treasury and cause the fall in the value of the dollar in turn causing other countries to withdraw and invest elsewhere. That, coupled with Russia and China doing trade in Roubles and Yuan, India and Iraq trading oil outside of dollar, Germany and China trading outside of Dollar, the strenghtening of BRICS bank etc, Dollar has been showing a steady decline. So India should also wisen up and start replenishing its treasury with gold and sell off holdings in dollars and euros and invest in other currencies on the rise. This is one reason BRICS could be very important for India and other countries in BRICS whether we like it or not. Another thing that using another currency would do, it would take away the power of the US to slap economic sanctions on whichever country they choose. This is one of the major reasons Putin has teamed up with China - in order to bypass US sanctions. [Edit: The thing that worries most nations is this - having international trade and foreign reserves in dollars gives US a single handed say on their economies. Just like Nixon's unilateral decision changed the fate of all currencies, other decisions by it can also change their economies. US can dictate their rules and if you don't follow them - sanctions. So the countries want to take back the power of making decisions in their own hands. Next, the petrodollar is based on a commodity that is being depleted. Oil reserves are declining and the world is moving towards other sources - gree energy, nuclear energy etc. So the petrodollar decline is destined. However, what would US do next? They could shift to backing their currency with nuclear reserves or some new crazy idea out of someone's hat. That will, inevitably affect all other countries and they want to and should have a say in it.] On the other hand, China's attempt to start a gold backed currency may not pan out because like I said all the gold in the world is not sufficient to back all the currencies in the world. Also, since most currencies still have a large amount of dollar backing, fall of the dollar would make that percent of the currency valueless and therefore even having a reserve in another foreign currency could still cause a fall in Indian currency though it might be a little mitigated. On the other hand, fiat currencies are run by the investors' trust in the currency. So even if the dollar falls, a fiat currency with foreign reserves in the dollar may not fall because the confidence in that currency is still high. Sadly, such a currency would be Chinese Yuan. So, the policy to fix this? I am still trying to work on that solution. This is a post in evolution. My thoughts on this are still in evolution and I would really like some economists to come and hold a serious, well informed and sane discussion on this. I will add more when other points occur to me or are brought forward to me in any online or offline discussions. Edit 2 : Also read some interesting discussions I had regarding this :
Hey everyone, I have been working on a blueprint for a crpytocurrency based on Ethereum blockchain. I initially wasn't interested in Ethereum as I wanted it to be based on a Proof-of-Stake model so people can make money rather than using money for electricity and machinery costs. Now since it is moving to Casper, Ethereum seems like the way to go! Ok, to make it short TLDR - I want this to be a Non-Fiat Coin (Currency), which will have a real value, and not some arbitrary number, so coin holders don't lose money, and the valuation is based on real assets and not on the valuation of the infrastructure of the crypto. Lets face it, people don't want to pay for the road, they just want to pay for the destination. So i floated this among a few buddies, here is the Q&A:
What is a Fiat Currency? (Trust me, some didn't know that the currency we use is a Fiat Currency :)
Fiat money is currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material from which the money is made. (From Investopedia) 2) Why do we have it? Well, for a government to manage buying gold and land while maintaining currency liquidity in the market is practically impossible. And as markets mature and as they become more complex to evaluate, a fiat currency is the only logical way for a government to manage its money supply. 3) Does it have shortcomings? Many. Plenty. As the money isn’t backed by any real assets, it has a definite downside. Rampant inflation is the worst possible outcome for this type of currency. Zimbabwe is the worst case scenario. Venezuela is suffering under a massive currency devaluation now. The Turkish lira fell 40% against the US dollar this year. The Indian rupee had the worst run against the US Dollar ever this year and the drop off seems to worse every week. The list will go on, and on, as governments wage economic sanctions against each other. 4) I am not from one of these ‘type’ of countries, why I should I opt for a NonFiatCoin? Nobody actually thinks they are from this type of a country, until it actually strikes them. Brexit caused a 10 percent decline against the dollar. A 31 year worst. 5) What does this new NFC offer? Assets behind the cash. 80% will be in hard assets like real estate, more liquid assets like stocks, mutual funds etc. 10% will be in currency purchases of the US Dollar, Pound, Euro and Renminbi. 10% will be for staff, founders, legal and technology investment. 6) What kind of returns can the coin holders expect? I certainly don’t expect Bitcoin and other crypto type crazy returns. The NFC will be a simple, boring and sturdy value holder. Now, since we will constantly and consistently be investing in the infrastructure and technology behind the coin, there might be some significant jumps in the value as we keep developing some unique algorithms and payment mechanisms. But the most important aspect of this will be that your money is secure. It will hold value, your money will not vanish or depreciate. As the asset holdings increase in value, so will your money per coin held. This is a long term currency asset. 7) What type of asset purchases are expected when the ICOs raise money? Rental Generating Assets – Commercial and Residential in highly liquid and transparent markets like London, Berlin & Paris. Land holding Mutual Funds – such as Vanguard Stocks, Gold Assets, etc. As we get more diversified, we will venture into commodities and maybe even buy a coffee plantation! 8) Which countries will you enter? 2 types of countries. A – Who have no rules or regulations against crypto currency – here we will have crypto exchanges to change the tokens into cash or bank transfers. B – who allow 100% foreign ownership of companies If a country allows both, we will have full fledged operations in those countries, no matter how big or small the market. If a country allows only crypto currency without 100% foreign ownership of companies, here we will provide exchange & banking services but will not purchase assets. If a country allows only 100% foreign ownership of companies without crypto currency, here we will open a subsidiary asset holding company which will provide asset purchases services to the parent company. 9) What are the other services you will provide as the NFC matures? A) Loans – we will make the coin holders the bank and they will become bankers in a sense using our platform to disburse the loans at an interest rate they deem is reasonable. B) Currency Exchange – People from one end of the world can trade their currency with people from another country. C) Asset Liquidity – If a person with an illiquid asset such as a house or a car would like to raise funds, they can pledge their asset with NFC and get funds from other NFC holders with liquid funds. 10) What is the final outcome you are looking for? One currency for the world? Beat the US dollar? None of the above. Only to complement the world financial system with a global alternative. One that does not cave under any politicians or country’s whims and fantasies. Hurting the NFC would mean hurting your own assets as the asset holdings will be truly interconnected. No single currency since the dawn of time has dominated the globe. Some have made a mark like the US dollar. Some are here to stay. And NFC plans to be both of them. Sorry if any grammatical errors. Let me know what you all think? Is this a good idea? Will it make people interested? Any questions?? And if anyone is interested in working on this with me, email me at: [email protected]
How is the Indian Govt. backed currency (INR) any more valuable than an International Decentralized currency (Bitcoin)?
Small rant incoming. So I was going though this interesting thread on this sub created a few days ago about BTC market conditions. First of all, let's understand that fiat money of today's world (INR, USD, AUD, etc.) isn't backed by any real thing like gold or other precious metals (Bretton Woods system collapsed in 1970s ending that kind of thing). All we have is a promise or IOU kind of thing where the RBI "promises" to pay a value of Rs.10 against a ten rupee note. Proponents of govt. backed currencies think that this govt. backing makes the fiat currencies somehow have any "intrinsic" value and that Bitcoins are totally valueless or worth zero. This seems to be the impression of many people on this sub too, so I want to clear your misunderstanding. If you consider for a moment, INR only has a govt. backing in theory, nobody sitting at a counter in Reserve Bank ever really pays you Rs. 10 worth of anything if you hand them the Rs. 10 Note as "promised". Its actually us people who do that, so the value of a currency is basically in the perception. For example, a ten rupee note will be a worthless piece of shit tomorrow, if every Indian stops accepting it for some reason (it will never actually happen, this is just hypothesis). Bitcoin's perception value is also increasing in many countries across the world, though it isn't widely accepted in India yet. Thus, bitcoins are worth a lot and many investors believe that this perception value will only keep increasing in the future, that's why it has jumped so much in price in last few years. Besides, let's also understand that the fiat currency's govt. backed "promise" doesn't actually mean anything. For instance, we saw demonetization happen last year when Rs.500 and Rs.1000 notes were banned overnight. So, what happened to the so called "promise" then? With a crypto currency like Bitcoin, people can stay assured that no central agency can destroy their wealth overnight by imposing a currency ban, so its even more valuable than a fiat currency from a security and functionality point of view.
"To act wisely when the time for action comes, to wait patiently when it is time for repose, put man in accord with the tides. Ignorance of this law results in periods of unreasoning enthusiasm on the one hand, and depression on the other." - Helena Petrovna Blavatsky
How many tractors is it worth? A topic that gets discussed a lot is the Doge/BTC conversion rate. Whenever there's a move you can't get through a page without at least a few posts about how we've beaten xxx satoshi and all debt everywhere is about to disappear! Or we've dropped a few satoshi and it clearly needs to be interpreted as the arrival of the fourth horseman of the apocalypse. So let's have a look at what it actually means. That measure of value is how many hundred millionths of one bitcoin that one doge is worth. Ok... so what does the movement of that number mean for dogecoin? Not much... sorry. It doesn't necessarily mean dogecoin has gone up or down in value, it could just mean that bitcoin has risen or dropped and dogecoin is worth a little more or less bitcoin. It could mean that people are trying to manipulate the price by buying or selling huge amounts to incite panic. Valuing dogecoin based on a different cryptocurrency that has its own fluctuations, its own successes and failures, is a bad way to view success for doge. Also, knowing how many bitcoin we can buy with it is useless because, if you have dogecoin why would anyone want to buy bitcoin with it?? Take the current rate for example, at the time of writing this dogecoin is sitting around 280-290 satoshi, the highest rate it has achieved steadily. The last time it was near that high in late Jan though, bitcoin was worth about $200 more per coin, therefore 230 satoshi at that time meant doge was about the same value in USD that it is now at 280. So am I suggesting that we measure it against USD instead? No. USD also rises and falls constantly, as does every currency, as does the value of every thing that can be purchased. What I'm saying is that this is not a thing worth obsessing over. If you looked at charts of USD against other currencies and saw it going down for a few days, would you suddenly panic, take all of your money out of the bank and exchange it for Indian Rupees because someone on the internet told you that the whole US economy is about to disappear? Dogecoin's value is reliant on what you believe it to be. People have faith in fiat currency, so it has a value. You don't need to look at how many bitcoin your doges can buy, all you need to do is believe in the Ð.
Waves and Meditation Any time you're worried about the price of doge, do yourself a favour and look at the doge/BTC chart on cryptsy, click on the 1M button above it to see the last month, then in another tab play this. Then you will see, all the movements are just waves. Sometimes big, small, high or low, but don't let them stress you. They're natural, perfectly normal. There will always be peaks, and always be drops, that's the way it will always be. You can't fight the waves, so why spend all your time focussing on them and stressing about them? Remember shibes, the tides are caused by the moon. As we get closer to moon, tides rise, with the moon pulling its beloved dogecoins and shibes closer to where they belong. The moon is further away on some days than others, but please don't ever let that make us lose sight of our destination.
But JakeTheDoge, I had the charts surgically implanted into my retinas so I could watch them 24 hours a day! What will I do now?! Well, oddly technological shibe, why don't you try spending a little less time obsessing over meaningless temporary changes and instead spend it looking into what new developments are being made in dogecoin! Or finding new things for us to support and telling the dogecoin foundation about them, or thinking of your own way that you can help spread the love to new shibes! That is what dogecoin truly needs from its shibes, and every little bit you can do to help makes you a part of the revolution of internet currency. So tell your friends, petition your favourite websites, put stickers on anything that won't get you arrested, anything! Do you want to tell your children that you once had thousands or millions of doge but you panic sold them when they were worth a fraction of a cent and that's why dinner will be spam again tonight? Or will you take them shopping for whatever they want, tapping your wrist against the register with your digital doge wallet implanted under your skin (probably... apparently people already have screens on their retinas, subcutaneous doge wallets can't be far off) while telling them for the 400th time that you were there, right at the beginning you were there, and you helped make a revolution.
Tl;dr Worried about doge/satoshi rates? Stop looking at charts, go lay on a beach and listen to the waves, then your moon ride is gonna be silky smooth. Just relax man, the Ðoge abides. 1 doge = 1 doge = love Love, JakeTheDoge – moonship technician
P.S. As I mentioned here I am doing this not for profit. So if anyone is interested and tips in my bloge posts, half of that will go to the dogecoin foundation and the other half will be used for giveaway threads, most likely done once a week if it goes well. Thanks shibes!
Tax notices to cryptocurrency investors in india 2018 because trading hits 21,000Crore
Back in India, the Bitcoin picture is still unclear. While SEBI has made a remark over the Bitcoin regulation, the IT department is set to issue notices to over 500K Bitcoin traders across the country. * Trading on crypto exchanges cross 21,000Crore in India- official * Tax dept seeks payment of tax on capital gains * Govt may introduce a bill to regulate crypto currencies — Source * Govt likens cryptocurrencies to ‘Ponzi schemes’, warns investors By Rupam Jain and Manoj Kumar NEW DELHI, Jan 19 (Reuters) — India has sent tax notices to tens of thousands of people dealing in cryptocurrency after a nationwide survey showed more than $3.5 billion worth of transactions have been conducted over a 17-month period, the income tax department said. Tech-savvy young investors, real estate players and jewellers are among those invested in bitcoin and other virtual currencies, tax officials told Reuters after gathering data from nine exchanges in Mumbai, Delhi, Bengaluru, Pune and Surat. Collecting over 2 Mn Bitcoin traders’ details from exchanges, the IT department in India is set to issue notices to around 400K-500K HNIs(high net worth individuals) for trading Bitcoins in significant numbers without paying any tax over the gains. Governments around the world are grappling with how to regulate cryptocurrency trading, and policymakers are expected to discuss the matter at a G20 summit in Argentina in March. The Indian government has issued repeated warnings against digital currency investments, saying these were like “Ponzi schemes” that offer unusually high returns to early investors. it has not so far imposed curbs on an industry estimated to be adding 200,000 users in India every month. B.R. Balakrishnan, a director general of investigations at the income tax department in the southern state of Karnataka, said notices were sent following the survey to assess the penetration and patterns of virtual currency trade. “We cannot turn a blind eye. It would have been disastrous to wait until the final verdict was out on its legality,” he told Reuters. The tax department has asked people dealing in bitcoin and other virtual currencies such as ethereum and ripple to pay tax on capital gains. They have also asked for details about their total holdings and the source of funds in the tax notice seen by Reuters. “We found that investors were not reflecting it on their tax returns and in many cases, the investment was not accounted for,” Balakrishnan said. Bitcoin, the world’s biggest cryptocurrency, soared more than 1,700 percent last year, hitting a record high just shy of $20,000 as institutional and retail investors around the world snapped up the virtual currency. Its huge gains have attracted the attention of global regulators tasked with protecting investors from fraud. In recent weeks, Japan and China have made noises about a regulatory crackdown, while South Korean policymakers said they were considering shutting down domestic virtual currency exchanges. REGULATION An Indian finance ministry official said a federal committee was looking into the possibility of imposing restrictions on virtual currencies and that eventually parliament would have to legislate a regulatory regime. Officials at Zebpay, India’s leading bitcoin exchange, said the industry was adding near 200,000 users every month with an estimated trade volume of about 20 billion Indian rupees ($315 million). “Many of our customers are treating digital currency like gold,” said Zebpay co-founder Saurabh Agarwal. Aman Kalra, marketing head of Coinsecure, a bitcoin exchange in New Delhi, said more than 150 bitcoins were changing hands every week through its platform. The company has 100,000 registered users and is now launching a platform to sell ethereum and other digital currencies. “I don’t think anyone in the government or Govt. official in india should label our business as a ‘Ponzi scheme’, we are not doing anything illegal,” said Ronak (WhiteMoney Exchange). Surat, Jan17, Bitcoin wallet firm WhiteMoney today said it has crossed Rs 40crore turnover within 3 months of operations as more Indians are going for the digital currency. “In only 3 months, the company has crossed 50 crore turnover” WhiteMoney said in a statement. Bitcoins are digital money and their value is determined on the basis of their demand and supply. The digtal money is limited in numbers. Only 21 million Bitcoins can be generated globally and they can be traded even in fractions, up to eight decimals. Last bitcoin will be generated in 2140 but 99 per cent would be already there by 2040. Tax inspectors said they sought help from experts in blockchain, the technology that underpins bitcoin, to conduct the survey. In some cases, tax officials themselves participated in the trade to identify loopholes after they found investors had poured in billions of dollars through unregulated exchanges. The biggest worry for New Delhi, the finance ministry official said, was how to protect investors trading on offshore exchanges. Already hundreds of investors have gone to the police and courts with complaints of transactions in virtual currencies that turned out to be fraudulent, said Pavan Duggal, a Supreme Court lawyer specialising in cybercrimes. “Considering cryptocurrencies are here to stay, the government must consider granting limited legality while ensuring that these are not used for crypto crimes,” he said. ($1 = 63.7625 Indian rupees)
XRP - Indian Rupee Chart (XRP/INR) Conversion rate for XRP to INR for today is ₹18.06 . It has a current circulating supply of 45.2 Billion coins and a total volume exchanged of ₹149,679,826,964 In order to convert Russian Ruble to Indian Rupee into another currency, a user enters an amount of money (e.g. '1000') and chooses the currency he/she wishes to check the monetary value of (e.g. 'United States Dollar'). After that, the user selects one, or sometimes several other currencies, he/she would like to see the result in. The Argentine peso is stronger by 0.9%. Among weakening currencies, the Indian rupee tops the list, off by 0.5% against the greenback. The euro is fractionally weaker at 1.12 against the dollar today. The Indian Rupee, however, one of the oldest currencies in the world, was introduced in the 1500s but is more unstable in value likely due to differences in economics in both countries. Compared to the Kuwaiti, India relies on the importing of certain goods and isn’t sitting on top of valuable resources like oil. This currency rates table lets you compare an amount in Indian Rupee to all other currencies.
NEW Indian 500 and 2000 Rupee Notes - Indian Currency
Why Indian RUPEE is falling against US dollar? and why prices of petrol & diesel is also increase? - Duration: 10:56. Interesting Top 10s In Hindi Recommended for you Please watch the video of the value of Indian Rupee compare with other currencies. one rupee equals to how many US dollars. US dollar to INR. Indian Currency rupee comparison to dollars. Narendra Modi discontinued Rs 500 and Rs 1000 currency notes to curb black money 1 in indian currency 1 in indian money 1 indian currency 1 indian money 100 inr 100 rs coin in india 100 rs coin ... The history of the Rupee traces back to the Ancient India in circa 6th century BC. Ancient India was the earliest issuers of coins in the world,along with the Chinese wen and Lydian staters. The ... Indian rupee value in other countries top 15 countries currency is lower then rupee Facts mojo By #manoj_kantimanthi for more videos subscribe #factsmojo h...