Popularization of bitcoins in India will result in prohibition of bitcoins and criminalization of the whole area. From government point of view it is illegal alternative remittance system.
When it happens, we all know whom to blame for that.
I do not think it will be any different from what ECB and finCEN have done.
Regulations, KYC, AML at the most.
first person to go to jail will be buysellbitcoins, next they will get frozen all bank accounts of people who has done transactions with him.
Indian business model based on prohibition. Once it will come to their attention, I have little doubts what will be the next.
I cannot see the same happening.
In the event that there is a new introduction into a financial space which does not look legit, the RBI/ Court will first issue a cease and desist warning. If the business does not comply with the warning, that is when trouble starts.
This has not happened as yet, although certain banks have been getting curious.
Also, There has been no Ponzi, no complaints or no damage done to any individual through actions till date, hence, I cannot see this as a large problem.
What we need to be ready for, is a disclosure of Bitcoin income for taxes. But that is only for sellers/ buyers who use a centralized service.
There is absolutely no documentation on what can be done if physical goods/ digital goods are sold for Bitcoin. That is the eventual place where it needs to be at. Where people trade on a daily basis rather than speculate.
