Last year, the Republic of India overnight banned 85 percent of its fiat cash in circulation. As a way to address “black money” presumably used in nefarious dealings, government policy makers demanded certain Indian Rupee (INR) denominations be returned. It’s citizens now have an incentive to begin looking for alternatives to government money.
India’s War on Cash
India is the world’s largest democracy. With over one billion people, its government often lurches and sputters to find the right fix on any number of issues. This is especially true in matters of monetary policy.
When it felt duty-bound to effectively sack its INR in the most popular amounts, it did so without warning. One day 500 and 1000 INR bills were legal tender, the next day they were not. Indians were pushed to banks, hoping to salvage what might be left of their personal wealth.
The equivalent in the United States might be if 10 and 20 USD paper was no longer useable.
India also has an enormous unbanked population, and its poverty levels have been extensively publicized. These are the people who live on smaller numbered cash bills, be they for employment or simple market transactions.
Even if for more affluent members of India, the sudden government move was a wake-up call as to the power politicians have over the paper in the average person’s wallet and even their accumulated wealth.
Bitcoin as Refuge
For these and other reasons, bitcoin has surged, as it has all over the world, in India.
Wallets such as unocoin are sprouting up to meet increasing demand (it’s website ticker mentioned withdrawals were being processed manually at the time of this writing). Exchanges such as Zebpay and coinsecure are generally well-received as methods of moving out of INRs and into bitcoin (currently 1 BTC : 348,385 INR).
India has become so tech-savvy and interested in cryptocurrency, yet another part of its vast government launched a public/private consortium, Start-Up India. It acts as an incubator of sorts, and its official recognition appears to be a coveted stamp of approval for less-established business.
Touting such recognition is India’s latest entree into the exchange market, BitBox.
The company hopes to gain market share by providing “free trading,” its press material reads, charging only “on deposit & withdraw. Further our charges are not flat and get reduced up to 0.1 % based on user trading volume.”
It wants to be the easiest service of its kind in India, customizable with access to trades in a few simple screen motions.
Bitcoins “can be kept on your balance in a safe cryptocurrency cold storage, traded, or withdrawn to personal wallets at any moment,” BitBox states.
Precious few details are known about the start-up, as is usually the case. The application is available on Google Play, and reviews are mostly positive. BitBox version 1.0.16 permissions seem in line with the industry, but it’s always a good idea to read them along with customer feedback carefully before downloading.
Exchange competition signals a healthy sign for the India bitcoin ecosystem, and with smartphone ubiquity on the rise those hit hardest by government policies may well have a viable alternative in bitcoin.
Are crackdowns on cash an ironic way to send more people to bitcoin? Tell us in the comments below!
Images courtesy of: Getty, Reserve Bank of India, hdwallpapers.
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