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Despite the RBI advising a cautionary stance on the use of crypto currency Bitcoin, Unocoin, a company dealing in virtual currency, has secured a $250,000 investment from SecondMarket Founder Barry Silbert’s Bitcoin Opportunity Corp.
This is the first ever publicly announced investment in an Indian entity that provides Bitcoin service.
Pioneered by SecondMarket founder and creator of the Bitcoin Investment Trust, Barry Silbert’s Bitcoin Opportunity Corp. has invested in more than 30 digital currency companies across the globe, including BitPay, CoinBase, BitPesa and others, according to a company spokesperson.
Unbanked demographic“As Bitcoin awareness and adoption in India accelerate, I’m confident that the Unocoin team will be successful in building one of the largest Bitcoin companies in India,” Silbert said in a statement.
The logic for Bitcoin remains the same — tap the large swathes of unbanked population in India, comprising tens of thousands of people who all own mobile phones but do not possess bank accounts.
According to estimates, 40 per cent of India’s population is unbanked, which is high when compared to other emerging geographies.
Currencies such as Bitcoin aim to change this anomaly.
According to Sathvik Viswanath, co-founder of Unocoin, around 40 per cent of the country’s urban population and 60 per cent of the rural populace are unbanked.
India is also one of the largest recipients of remittances globally, totalling over $70 billion in 2013 and Bitcoin technology can enable people to transfer money at minimal cost, according to Viswanath.
However, as Bitcoin does not fit into any of the traditional financial systems worldwide, it has been under the lens of regulators the world over.
Regulator’s diktatIn India, last December, several Bitcoin exchanges pulled the plug and halted trading following a statement issued by the RBI warning consumers and investors to steer clear of Bitcoin, citing numerous risks associated with digital currencies.
Despite this, companies such as Buttercoin, a venture backed by Google, Coinmonk Ventures, Unobit Solutions and VentureNext are trying to build the ecosystem that would make Bitcoin an acceptable currency, similar to gold, silver or the rupee.
“The big opportunity is in the overseas remittances segment and financial inclusion,” said Vikram Nikkam, head of Unobit.
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