India recently made it to the news by doing the unthinkable — declaring two of its existing large denomination currency notes invalid. The move effectively removed an estimated 80 percent of the currency notes out of circulation drastically affecting the country’s economy. The government insists that the move will root out unaccounted cash and counterfeit currency, which is debatable. However, on the brighter side, the government’s move is expected to ease the country towards a cashless economy.
In his recent address, the Prime Minister of India — Narendra Modi defended his move by calling for increased adoption of digital payments. He went on to say,
“It is not necessary for the people of India to conduct their transactions with wads of cash in hand. Instead, they can make use of the digital payments facilities to spend the money which is rightfully theirs.”
He appealed to the country’s citizens to make use of mobile payment applications and online banking facilities to conduct transactions at the time of cash crisis. The “demonetization” move has increased the interest in Bitcoin among many Indians. The sudden surge in demand for digital currency has increased the price of one bitcoin by over $200 in the domestic market.
The Prime Minister stressed upon the need for transparency in the Indian economy and the only way to do it is by gradually moving towards digital currency. However, by referring to digital currency he meant electronic payments and definitely not cryptocurrencies like Bitcoin. In a country where most transactions happen in cash, the government’s move has affected businesses and individuals alike.
The sudden demonetization move has also made the disadvantages of government controlled fiat currencies evident. As people struggle to exchange their now invalid banknotes for the valid ones, the need for a global currency like Bitcoin that is not at the mercy of the whims and fancies of the government has emerged. Hope people get the idea and start using Bitcoin and other cryptocurrencies instead of fiat, which can, at any time serve as an instrument of propaganda for the government to serve its own needs, against the best interests of the citizens.