What’s Happening with Bitcoin in India?
See also: ¿Qué pasa con el Bitcoin en la India?
Bitcoin and other cryptocurrencies continue to surge in popularity in India, the second most populous nation in the world. The country also ranks #2 in the 2021 Global Crypto Adoption Index by the blockchain data platform Chainalysis. What’s happening with Bitcoin in India? What are the reasons why the country might be ready for some cryptocurrency growth? Read on to find out!
Demographic potential
India is one of the most potential countries in the world when it comes to Bitcoin and cryptocurrency adoption. With a population of 1.4 billion people, or 18 percent of the whole world’s population, the demographic potential for cryptocurrencies in India shouldn’t be underestimated.
Clearly, only a fraction of people in India are cryptocurrency users. Why? Well, according to statistics, there are currently around 300 million cryptocurrency users all around the world. That’s only about 20 percent of the population of India. Even if only 20% of the people in India started to use crypto, the global amount of crypto users would double.
It seems like the adoption is starting. According to the 2021 Global Crypto Adoption Index by the blockchain data platform Chainalysis, India ranked number 2 in the index, right after Vietnam.
Indian people who dabble with cryptos are not only people in the big cities anymore, but the data indicates that more and more people living in small towns and cities across the country are dipping their toes in Bitcoin and other cryptocurrencies. If you think of it, this makes complete sense! The question should be: why would someone NOT use cryptocurrencies in India? There are many use cases for Bitcoin and cryptos in India. And in this article, we will share some of them.
World’s #1 recipient of remittances
One of the best use cases for Bitcoin is remittances, sending money from one country to another. India has a large expatriate population, which makes it the world’s number one remittance recipient. According to a United Nations report from January 2021, 18 million people from India lived outside their homeland in the year 2020, and India received in total $83 billion in remittances.
Remittance is a very profitable industry for money transmitters. However, by using Bitcoin, those cuts can be easily reduced or even eliminated completely. For example, on LocalBitcoins you can send money to India by first buying Bitcoin in a country you want to send money from, let’s say, from Germany. After buying Bitcoin with euros, you can then send those bitcoins from your LocalBitcoins wallet to another LocalBitcoins customer in India instantly and without fees. After that, the recipient in India can then sell those bitcoins to Indian rupee.
LocalBitcoins only charges its customers trading fees (escrow fee) when the customers trade by creating their own advertisements. By only responding to other customers’ ads, it’s possible to send money from one country to another without any costs.
Get paid in Bitcoin!
Another big use case for Bitcoin and crypto in India is payments. This might come off as a surprise for some because “hodlers” often don’t want to part with their bitcoin since they expect that the price will go even higher in the future.
As is the case with remittances, Bitcoin can also be used for payments because the payment will often settle much faster than with using traditional ways of paying for goods and services. India has a large and talented pool of freelancers working in various fields, such as graphic design or video editing, and very often those freelancers have international clients.
Receiving a salary through a bank transfer that can take days and charge huge fees might be a very inconvenient choice if there’s an option to get paid in Bitcoin. Transactions on the Bitcoin blockchain settle in around 10 minutes, and if you’re using a custodial solution such as LocalBitcoins, the transfer of funds is instant and doesn’t incur any costs. So, if you’re a freelancer in India or anywhere else in the world, request your overseas employer to set up a LocalBitcoins wallet to pay you in Bitcoin fast and cheap!
According to the World Bank, about 190 million people in India don’t have a bank account, but if you’re one of those 190 million people right now reading this article, you may have gotten lucky because you can create yourself a Bitcoin wallet by following this registration link. A Bitcoin wallet is a bit like a bank account in the crypto world that lets you send and receive payments all over the world, and once you get sucked in, maybe you don’t even want to have a bank account anymore!
Loss of purchasing power of the Indian rupee
The next reason for using Bitcoin in India is inflation and the loss of purchasing power of the Indian rupee. History has taught us that all fiat currencies have been steadily losing their purchasing power throughout the years and the trend seems to continue. The Indian rupee has lost half of its value against the US dollar since 2008. If you start to think of it, why would anyone then store value in national currencies, rupee or any other currency? Wouldn’t most people just spend the fiat as fast as they can and trade them to hard assets like Bitcoin! Well, that is exactly why many people in India are trading Bitcoin on LocalBitcoins.
Bitcoin follows a predicted inflation schedule. This means that we all know how many bitcoins will be issued into circulation. This is not the case with national currencies that can be printed on a whim. Because the amount of Bitcoin issued divides by half every four years, there will be less Bitcoin available in the years to come. If the demand for Bitcoin grows or stays the same, it would indicate an upwards trajectory for the price, keeping the long-term time perspective in mind of course.
Still outside the scope of regulation
One question that might come to your mind right now is if Bitcoin is legal in India. Before you start to invest and trade in Bitcoin, it’s best to make sure you’re not breaking any laws. As of November 2021, even though there are no laws in place regulating Bitcoin transactions in India, it is completely legal to invest in Bitcoin.
However, there has been some ambiguity around the legality of Bitcoin and other cryptocurrencies in India. The Reserve Bank of India banned banks from facilitating in crypto transactions in 2018, but the Supreme Court ruled against the ban in March 2020. According to the ruling, there exists no grounds for imposing the ban. As a result, cryptocurrency remains outside the scope of any regulations or guidelines in India.
Sensible regulation would be well appreciated because with a large population of almost 1.5 billion which is also young, tech-savvy and eager to adopt new technologies, India is a strong contender to lead the world in the world with digital currencies.
