I have read and researched extensively on bitcoin, but I haven't found any service like coinbase that allows a user to buy or sell bitcoins online without having a US bank account. So how can one start an exchange like coinbase for India ? What are the legal obligations and initial startup cost ? Any advise would be welcome.
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You should visit rbitco.in It serves all your purpose.– Nilam DoctorMar 11, 2013 at 17:09
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Nilam, that may be true, but it's not really answering his question.– Nick ODellMar 12, 2013 at 0:21
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Yes, Nick, you are right. But the only option available for trading is localbitcoins.com. rbitco.in is also coming up with solutions for individuals. I just came to know about it and hence replied.– Nilam DoctorMar 12, 2013 at 5:09
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2 Answers
You should first consult a lawyer in your country and discuss such topics as:
- Money laundering laws
- Whether Bitcoins are considered a currency, commodity or none of the above
- Regulations considering money exchanges
In relationship to the law in your country. It would also be good to asking a legal representative of the government for an official statement in writing on trading Bitcoin and their legal status. This way you would be able to refer back to that decision in case any legal doubts come your way.
Having done that, the procedure would probably be similar to starting any business in India, with a possible addition of any special laws that you'd have to abide by when running an online money exchange.
I should state however, that I am not a legal expert nor do I have any experience with running a business in India. As stated above, consult a lawyer before taking actions.
answered Feb 15, 2013 at 12:49
If you're a developer you could start with some open source exchange software. Bitcoin Central provided this: https://github.com/davout/bitcoin-central. It might be a bit out of date now, but should be enough to get you or another developer off the ground.
Alternatively, you could just set up a website that reads the latest BTC/INR price from, say, Coin Mill and then provide a business account that allows people to deposit sums. You'd need to ensure that their deposit contained a reference number and was tied to their originating bank. After the deposit clears (so is irreversible) you can release the bitcoins you had on hold for them.
I'm not a lawyer, nor familiar with the legal situation for money handling in India. You will need a local lawyer to advise you with taking business payments through a bank. However, most countries require you to keep Know Your Customer (KYC) records of anyone who you deal with in fiat currency (like INR). This is for Anti-Money Laundering (AML) treaties that many countries have signed up for.
India would greatly benefit from having low-cost/friction access to Bitcoin so you might be able to approach the Bitcoin Foundation for assistance.
