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9:09 am - Tuesday January 23, 2018

ASSOCHAM demands urgent ban or regulation on Bitcoin and ICOs

Agencies, New Delhi

Advocating either policy framework or firm stop, for the Bitcoin which is attracting average 3500 new users/entrants in India alone, one of the leading industrial body ASSOCHAM has said that Indian start ups are more fascinating by Initial Coin Offering (ICO) route for raising funds, being Bitcoin’s bullish market than capital market, Private/Equity (P/E) or Venture Capital routes.

It has been observed that an ICO does not share the equity for investment but invest in the Bitcoin. The Chamber Secretary General D S Rawat said, until the government decision comes with either yes or no, the ICO’s should be immediately banned otherwise financial frauds will go on.

India should take a call to lead at international level by opposing China for power supplies to Bitcoin miners which is causing massive emission of Carbon and is also posing a consequential threat to the environment. India’s capital market is also under threat due to the fact that the significant surplus savings are being diverted as investment to the cryptocurrencies.

The investment interest of the investors in the Bitcoin is increasing without having any understanding of underlying technology, the quantum of risk involved, and their capacity to afford risks. Mr Rawat said that in the absence of any legal and regulatory system in place in India, the investment risk is not only to the investors but the economic value loss may also hamper India as well.

Therefore, merely repeated warnings by the RBI about Bitcoin investments are not enough to protect the interest of investors Mr Rawat added. ASSOCHAM said, China is preferred host country for Bitcoin miners due to its capacity to supply the required electricity.

The estimated electricity consumption per year is nearly 32.57-Twh (Tera watt hr) and estimated emission of Carbon per mining is equal to 1 Boeing 747 that emits 92 kg of Carbon per hr. China leads in numbers of Bitcoin mining pools, supplies the electricity at a comparative cheaper price, and has control more than 70 per cent of the Bitcoin network’s collective hash rate.

Estimated Electricity consumption per Bitcoin transaction is 237 Kwh, and this mining industry consumes electricity which is more than household power consumption of the world’s 180 countries. China and South Korea have banned ICOs in their respective countries and recently, US-SEC has charged organisation for ICO frauds.

Posted in: Business

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