The buzz around Bitcoin has been growing stronger steadily over the past few years. Though, a vast majority in India is still unaware of the digital currency. The government’s decision to demonetize Rs. 500 and Rs.1000 currency notes has catapulted Bitcoin into the foreground of people’s attention as they explore various cashless mechanisms in the face of currency ban in India.
Zebpay, one of the major bitcoin exchanges in India, claims to be adding double the number of users since the announcement. On being approached by NEWSBTC, they further added, “We will add 50,000 users this month. The queries for bitcoins have gone up by 30 percent in the past couple of days. At Zebpay, we have recently crossed 1,50,000 users and Rs 400 crores turnover. We are on target to achieve a turnover of Rs 1,000 crores this year.”
Amidst the chaos of demonetization and its problematic implementation, Bitcoin has gained considerable traction in the country, which is obvious from the increased searches for the keyword “buy bitcoin” as per Google Data Trends.
The Indian government’s motive behind the currency ban was to curb corruption. This step was in line with government’s aim to keep India’s “economic integrity” intact by rooting out the currency hoarders and ‘black money’ enthusiasts. Cryptocurrency supporters have welcomed this step and believe that bitcoin is the answer to ‘shadow economy’. Zebpay said,
“We welcome and appreciate this bold step by our PM. This decision has given a big boost to the creation of better and cashless economy. Once, the shadow economy is curbed, the nation will have better and safer alternatives for investing.”
The lower rate of transaction on bitcoin is one of the important reasons for the popularity of the digital currency. To use bitcoin is quick and easy as there are no additional costs as incurred on other cash/ cashless transactions. Moreover, for countries like China and India, with large diasporic populations, it becomes a feasible method to send remittances from abroad.
Some experts are of the opinion that what gold was to the previous generation, bitcoin is to today’s youth. The awareness in the millennials about the advantages of digital currency is yet another reason for the spike of Bitcoin demand in India.
The rising demand for Bitcoin also led to a bloating up of the premium paid for rupee-dominated bitcoin. USD 714 is what Bitcoin’s market price is floating around at the moment, which is INR 47,726 and it is being traded at INR 55,735 in India.
Another reason for the price rise is that the exchange has turned lopsided as people are only interested in buying bitcoins and not in selling them.
It was reported by most of the exchanges that the immediate rush following the demonetization announcement was that of the people looking to park their ‘black money’ against bitcoins. There were queries regarding the availability of bitcoins against cash, which is not possible.
Zebpay believes that the adoption of bitcoin is in tandem with the government’s aim of curbing corruption and its larger goal of making India a cashless economy.
“Bitcoins will be a great answer to the shadow economy,” the company stated. “Digital currencies solve a lot of the problems mentioned by the PM. It solves the problem of fake currency. Each transaction that takes place via bitcoins is recorded in a public ledger. This was designed so that transactions could be verified, and to keep double-spending under check.”
“To buy bitcoins, customers require to give their bank account details and undergo a know-your-customer (KYC) process. It is a cheap and fast payment network. Just like we use the Internet as our data backbone, digital currencies can be used as the backbone for our financial infrastructure. India has the opportunity to skip the credit card generation. Billions of Indians can go cashless using digital currencies far more cheaply and efficiently. It serves the purpose for the larger goal to be achieved more easily and effectively.”
The panic created due to faulty implementation of demonetization has had experts believing that even if the panic is short lived, the people who have turned to bitcoin, even partially, will remain interested in the promise that it holds for the future.
Bitcoin enthusiasts are elated and see the currency ban as an opportunity to boost bitcoin adoption in India. Bitcoin has the potential of realizing Prime Minister Narendra Modi’s dream of a cashless economy.
“This decision has been a positive trigger for the use and spread of bitcoins and related technologies in India. The bitcoin and blockchain community is working hard to help India go cashless. Interest in bitcoins has been increasing exponentially since the last year and we can see a sudden spike in interest since the demonetization drive. We have always been the believers of bitcoins and how it can change the future of currency. India has growing interest in bitcoin as an investment, commodity, and technology. With recent changes in the economy, the big change has already begun.” said Zebpay.
India has already started taking concrete steps in the direction of change. In June, the Reserve Bank of India had formed a committee to study the use of blockchain for “financial transactions where the entire data systems move to some more levels.” The bank has been looking for viable solutions to move forward in the direction of becoming a cashless economy.