After a stern warning from Reserve Bank of India and an effective ban on bitcoin transactions, Indian law enforcement agencies have decided to raid the country's bitcoin exchanges. For the last several months RBI, the Indian central bank, has been trying to prop up the rupee by blocking gold imports. India is one of the world's biggest markets for gold and precious metals trade has a big negative impact on the country's balance of payments. Now, RBI discovered that Indians are using bitcoins to avoid capital controls and to invest in assets unsusceptible to inflation. To a certain extent, bitcoin is becoming India's "digital gold", attracting the ire of the country's authorities. In order to stop the "leakage of funds" from rupees to bitcoins, the regulators first issued a warning for all Indian users of the digital currency: "The absence of information of counterparties in such peer-to-peer anonymous/pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism (AML/CFT) laws." On Thursday, officers from the federal Enforcement Directorate raided the offices of the biggest Indian bictoin exchange located in Ahmedabad. A law enforcement officer who took part in the raid shared the details with DNA India: "We have found that through the website 400 persons have recorded 1,000 transactions. At present, we believe that this is a violation of foreign exchange regulations of the country. If we are able to establish money laundering aspect then the owner can be arrested." After the raids, all bitcoin trading platforms operating in India halted their operations. The raid didn't affect the bitcoin price that has somewhat recovered after a severe sell off that occurred in the aftermath of a ban on bitcoin investments instituted by the People's Bank of China. It seems that the cryptocurrency is now a favorite financial instrument of the Western financial system. A member of the Goldman Sachs board of directors has just launched a company that will facilitate bitcoin payments between big companies. The Senate hearings about the cryptocurrency have been described by The Washington Post as a "bitcoin lovefest". At the same time, central banks in China and India are doing their best to restrict the usage of the digital currency. Maybe the central banks of developing countries know something about bitcoin that makes them hostile to the new currency? Valentin Mândrăşescu