Bitcoins may help grow world trade, says expert

KOLKATA: Central banks worldwide should consider the use of bitcoins as a means to enhance global trade as the virtual currency helps in carrying out business transactions at lower costs, according to a bitcoin expert.

"Use of bitcoins will enable global trade as well as control inflation but the central bankers are refusing to give credence to this fact," Aaron Koenig, Bitcoin Evangelist and Organiser of Bitcoin Exchange in Berlin, said.

Bitcoins, the biggest among all virtual currencies, represented 'denationalised money' and was being increasingly used in many transactions, he said adding that many companies were paying salaries to employees in the virtual currency.

"Bitcoins epitomises the libertarian approach as its value is entirely determined by the forces of supply and demand and also does away with the role of central banks in shaping the monetary policy of a country," Koenig told reporters here today.

"It is natural that no government or central bank will like to relinquish its powers as a result of which bitcoins are not becoming popular. But it will be so (popular) in future," Koenig said.

According to him, bitcoins are the safest and quickest means to settle transactions at low transaction costs.

He said the only thing which would have to be ensured was that there should be regulations to protect the 'private keys' from getting stolen from the cloud.

As far as India is concerned, the Reserve Bank had not declared it as illegal, but issued warnings about the potential financial, operational and security related risks.

The apex bank had warned about unintended breaches of anti-money laundering laws by using bitcoins for settling transactions.