The attention of the Commerce Ministry and Tea Board has been drawn to a section of small and specialised tea growers and exporters opting for US-based online trading platforms to use digital currency Bitcoin as a means of expanding their international business, bypassing the normal banking channels and thus depriving the Exchequer of revenue.
The price this kind of shipment fetches is fantastic, around $11 per 15 gm of tea. Any consignment of up to 4 kg, if sent out of India by an international courier, will attract no mandatory surveillance or monitoring.
In the winter session, several Members of Parliament raised questions about the use of the Bitcoin instrument by a section of small and specialised tea growers to sell their produce abroad. They wanted to know if the Government was aware of such practices, and if so, was it contemplating any action.
The Bitcoin instrument helps the exporter and the importer of tea clinch a deal directly without any middleman, thus cutting out the middleman’s fees. The transaction can be completed within a few minutes and weekly holidays, bank holidays or strikes do not stand in the way of concluding the deal. Also, payments can be received from anywhere in the world without any bank transfer or the use of debit or credit cards.
The modus operandi is this: Bitcoin agents partner with a payment processor such as Bitpay (www.bitpay.com) who charges only one per cent of the transaction value. Bitpay has integrated itself with over 12,000 merchants in 30 countries. Bitpay is flexible in its approach, depending on the types of services it offers its customers.
Bitpay integrators/partners help people accept Bitcoins for merchandise and in turn liquidate the Bitcoins for them and deposit Indian rupees in their respective bank accounts. There are no hidden charges, nor down payments or investments to integrate with Bitpay. It is a free service, which many of our tea exporters are believed to be adopting and using.
Similarly, according to tea industry sources, if one accesses www.madovercoins.com, one will find that all products are sold for Bitcoins to enable people to buy products sitting anywhere in the world.