Elephant Capital Managing Partner Gaurav Burman, has personally invested a undisclosed amount to buy a stake in Singapore-based Bitcoin exchange itBit, that trades in Bitcoins with US dollars, Singapore dollars and the euro with technology support from Nasdaq. Burman plans to bring the platform to India over a period of time, reports Times of India. itBit had raised $5.5 million to date from investors such as Canaan Partners and RRE Ventures with participation from Liberty City Ventures.
Burman’s investment comes at an interesting time as Bitcoin’s valuation took a hit in the last week because of developments in China. The biggest Bitcoin exchange in China announced earlier this week that it will no longer accept yuan deposits, due to which the value of the virtual currency dropped a bit. The announcement came two weeks after China’s central bank said that banks and payments systems were barred from handling the virtual currency.
Interest in Bitcoin exchanges, that let people trade Bitcoin in exchange for real currency, soared in November after US Federal officials said during a Senate hearing that many virtual currency systems offer legitimate financial services and have the potential to promote more efficient global commerce. It’s value touched $1,200 at it’s peak, but is now down to $713 after falling to $484 two days back.
The legality of the coin in India is still debatable as the Reserve Bank of India has not yet created regulations for trading or profits generated from Bitcoins. An RBI spokesperson recently told Mumbai Mirror that RBI doesn’t consider it to be a legal tender and, therefore “trading in Bitcoin is not legal. Obviously, there cannot be regulations from RBI for an illegal activity. People who use it, do so at their own risk and responsibility.” However, it needs to be noted that various sites (especially sites that deal in card based games) use virtual currency to buy virtual items so it is not clear what will eventually happen to Bitcoins in India. RBI worries that if they legalise Bitcoin usage in India it could be used to move black money out of India and to buy goods that would not be legally available here.
It needs to be noted that Buttercoin, a venture funded by Google Ventures is currently working with companies that develop software for banks in India, to make it possible for banks to accept Bitcoin.