With the per unit value of Bitcoin jumping past $1,000 and now $1,200 it has become the most valuable currency in the world and has even surpassed an ounce of gold. According to regulators such as RBI, Bitcoin has the potential to become the perfect currency for money laundering and illegal activities therefore, they are deciding whether or not regulations need to be put in place.
Any effort to actually control Bitcoin could end up being futile since the currency stretched beyond any country border and the users are in complete control of the market. This means that even if regulators wanted to introduce regulation to curb the growth of Bitcoin, it would be very difficult for them to do so.
As of now we don’t regulate bitcoins, but are observing developments. – RBI Spokesperson
The only viable option for RBI, Sebi, and other regulators if they were to try and stop Bitcoin from growing would be to make it incredibly difficult for people to turn back their money into a Fiat currency such as the US Dollar. Unfortunately, even the exchange of Bitcoin to and from a traditional monetary standard is primarily in the hands of individuals who operate on sites such as LocalBitcoins.
No longer is Bitcoin a fringe topic and something that people think is a bad investment which could fail at any time, instead, it is now viewed by many financial experts as a great way to remove oneself from the plummeting Dollar and even make some money along the way.
To some people, Bitcoins are simply a currency and a way of moving money around but many people have started to view it as an actual investment. Since Bitcoin’s value has doubled and tripled in just a matter of weeks, it simply does not look like a currency which makes it even more difficult for regulators to control it.
No matter how often the illegal uses of Bitcoin make their way into the mainstream media, Bitcoin itself is primarily used for legitimate and legal purposes. Sure, the potential for some people to use the currency to launder money is real, but money laundering has been going on for a significantly longer time than Bitcoin has been around and it won’t stop even if Bitcoin is shut down.