India is one of the most populous countries not only in South Asia but also in the world. It’s home to over 1.3 billion people, or about one-sixth of the world’s total population, making it the second most populated country after China.
India is an excellent choice for many stunning destinations, rich cultural experiences, and immersive adventures. But beyond that, India also has great opportunities to offer cryptocurrency—specifically bitcoin (BTC)—aficionados.
Read ahead to find out why bitcoin is popular in India and how to unlock great trade opportunities in your area.
A rapidly growing economy
In 2017, India was considered the world’s fourth-largest economy, garnering 9.4 trillion USD worth in production after China, the European Union (EU), and the United States of America (USA), respectively. This is despite the Great Recession, which began in 2008 that greatly affected various economies within the country.
If you’ve been reading about economic growth and development reports, you’ve probably seen some articles about India’s noticeable decline, based on the International Monetary Fund’s (IMF) projection.
In January of this year, an article published by Nasdaq noted that India, currently the fifth-largest economy in the world, has been dubbed as the “bright spot in the global economy” and has indeed experienced a hefty run down.
This decline, the article furthered, emerged from some “country-specific issues,” such as “stress in the non-bank financial sector, a decline in credit growth, cooling private consumption, slowing industrial activity, and stagnant investments.”
Despite that, the latest world economic outlook growth projections published by the IMF in April 2020 revealed that India is still among the emerging markets and developing economies in Asia.
For us to have a better grasp of India’s economic growth, let’s take a closer look at some of the “country-specific issues” mentioned previously and how they contribute to the growing adoption of bitcoin in the country.
India as an unbanked nation
While India may be one of the rapidly growing economies in the world, a significant percentage of its population still has no access to banks and financial services. In a conference about financial inclusion in India, it was mentioned that 11 percent of the world’s population still lacks access to bank accounts and roughly 465 million people from that statistic were from India.
You might wonder why a large part of the country’s population remains unbanked. Some of the critical factors behind this include the banks’ requirements for creating an account. Usually, banks ask for personal details like name, fixed home address—something you can’t ask from someone who may be homeless—and date of birth for identification purposes, to name a few.
On the other hand, while many are struggling to have access to banks, one noticeable fact is that the majority of India’s population is highly technologically literate. This is probably the reason why the country has successfully found alternative options to traditional banks in processing their payments and other monetary transactions. And what’s among the newfound alternatives? Bitcoin.
The perks of using bitcoin in India
We’ve learned some of the reasons why a huge percentage of India’s population still relies on using cash, even though it limits their spending abilities. But did you know that these reasons are also the answer to why bitcoin is popular in India?
Its privacy feature allows you to process various monetary transactions without the need to give away your personal information or share other transaction details, making each bitcoin transaction pseudonymous and secure.
Transactions with bitcoin are often cheaper, unlike banks that usually charge altering fees depending on the type, location, and purpose of a transaction. It’s also much easier to receive, send, and spend funds using bitcoin than with fiat currencies like the Indian rupee (INR). How is this possible?
Unlike INR and other government-issued currencies that are limited by a lot of geographical and regulatory factors, bitcoin and other cryptocurrencies facilitate borderless and nearly instantaneous transactions. This is what makes bitcoin a perfect match for those who regularly send and receive money in and out of Indian borders.
Aside from using BTC for remittance, it’s also known as being an excellent means of preserving value, much like gold and other similar commodities. Having funds in bitcoin protects your resources from the possible hurts of unpredictable price fluctuations—nobody wants to lose their hard-earned money, right?
The expanding adoption of BTC
As bitcoin continues to show and prove its unique features and remarkable uses, more and more Indians are fascinated by it. To further understand this, let’s consider data from Paxful, one of today’s leading peer-to-peer (P2P) marketplaces for trading bitcoin.
Paxful.com Indian rupee (INR) Volume
In the graph, we can see that there’s been a significant increase in bitcoin trade volume in India using INR from January 2018 until the present (May 2020). This is a good indication of stable trading performance in the country using their fiat currency, which only goes up despite the changing price of BTC to INR and vice versa. The data shows that, so far, the month of May marks the highest bitcoin trade volume in the country, following the second-highest mark, which was in October 2018.
Another notable fact is the steady increase in trade volume, which implies growth in the number of BTC wallet holders. As the number of new users rises, more and more people are becoming familiar with the exceptional use-cases of bitcoin and other cryptocurrencies.
These people are also probably doing their best to familiarize themselves with how this ingenious technology works—how and where to use bitcoin in India, how to convert INR to BTC, how to start a trade, and so on.
Interestingly enough, the rising count in the number of BTC users doesn’t only include individuals, but surprisingly, corporations and organizations as well. Reports say that hundreds of merchants are now accepting BTC as payment in exchange for products and services in different places throughout India, and this number continues to grow.
A supportive Indian government on crypto regulations
In 2017, the government of India announced that it is “in favor of regulating bitcoin.” To start, it created a committee in charge of gauging the crypto situation in India and providing recommendations. The Ministry of Finance also gathered public opinion on legalizing and regulating bitcoin and received comments expressing that most of the population agrees with the idea.
This year, in March 2020, the Indian government created a great deal of noise when the Supreme Court of India decided to knock down the “blanket ban on banks’ dealings with crypto businesses,” which was imposed by the Reserve Bank of India (RBI).
Currently, while the crypto community is patiently waiting and looking forward to the Indian government’s final decision, there are still no clear regulations about bitcoin and other cryptocurrencies yet.
On the flip side, crypto enthusiasts say that this vague and indefinite regulatory framework of bitcoin and other cryptos in India won’t make them think any less about the country and its crypto-related potentials.
Steady and robust crypto adoption is still a much-awaited phenomenon in the country. Perhaps some, if not all, in India’s growing crypto community will wave hello to these changes and accept them with arms outstretched. There might still be a long road ahead—we don’t know yet. Hopefully, the crypto community in India will welcome better crypto regulations very soon.