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The Future of Cryptocurrencies in India

Updated on April 09, 2020 12:46 pm
Cryptocurrencies in India

One can argue that while Satoshi Nakamoto invented Bitcoin, it is India that may well be the first country to entrench its credibility as an alternative monetary system.

Here’s why,

Back in 2013, India distrusted Bitcoin as “Wild West territory”, where scams like Silk Road, a darknet market for smuggling drugs, thrived, and where greedy geeks conned gullible individuals into wasting their money.

Although India didn’t know it at the time, its political and economic conditions made the country a perfect match for Bitcoin. Recent news shows India poised to become the first nation to regulate cryptocurrency.



India: Demonetization


On November 8, 2016, the Reserve Bank of India (RBI) removed 500 and 1000 Rupee notes from circulation, stripping the nation of 86% of its currency. India aimed to quell its shadow economy and to defeat its never-ending illicit activities. At the same time, this economic crisis indirectly taught its 1.3 billion people that cash was unreliable and that there was a nationwide frenzy with the stock market falling by 7 percent, cash shortages and several deaths from people queuing to exchange their worthless money. A significant disruption to the economy occurred with more of India’s largely younger population turning to Bitcoin. At the time, a large number of industries were already using Bitcoin and shortly, thereafter, the number of investors grew to the point where mid-2017, 2,500 Indians invested in Bitcoin daily, according to The Economic Times. The digital coin attracted people in India since it offered a safer system for their money, a haven from inflation, refuge from government regulation and interference, and a system that avoids political and economic turmoil.

India: Unbanked Country


India may be the 7th largest economy in the world with its GDP of $2.5 trillion but a 2016 study by PricewaterhouseCoopers found that 233 million people in India, or 40% of its population, still has no bank account. To put this in perspective, 65 million people live in Britain. This means that there are 3.5 times more unbanked people in India than people who live in the U.K. The fact that so many Indians are unbanked is because you need a form of identification and a fixed address, among other information, which for many homeless Indians is impossible. These individuals, then, rely on cash which hinders their spending abilities. Along comes Bitcoin which allows you to make deals all over the world quickly, cheaply and securely - without needing a bank account. No wonder, then, that to date more than 600,000 Indians use Bitcoin, according to several bitcoin outlets.

Indian companies using Bitcoin


Last year, more than 500 merchants in India and five of India’s largest companies, including Dell, accepted the cryptocurrency as payment, according to GBminers co-founder Amit Bhardwaj. The number grows by day. True, that Bitcoin is far from popular, and most Indians prefer fiat money, but a recent Forbes article reports Bitcoin's craze is catching on and that, to date, there are more than 600,000 users in the country.

India’s Government


Although India’s RBI has long warned cryptocurrency users and traders of its perils, Indian President, Narendra Modi, indirectly promoted Bitcoin, on July 2, 2015, with his ambitious Digital India. Plans included digitizing government data, improving India’s digital infrastructure, and optimizing its online connectivity. Last month, the government formed an inter-disciplinary committee to examine the framework on virtual currencies and set up a forum MyGov for public opinion on virtual currencies.

Last week, India’s Department of Economic Affairs in its Ministry of Finance met to discuss how Bitcoin could be regulated. The committee suggested the following: that cryptocurrencies should be governed by the Reserve Bank of India Act of 1934; that Bitcoin investors should be taxed; that guidelines for buying and investing in cryptocurrencies should be drafted; that the IRB should extend FEMA to cross-border cryptocurrency deals; and that users should be taxed on their cryptocurrency returns.

And the future?

Observers predict that India’s government will regulate Bitcoin in stages. India’s Bitcoin industry welcomes these changes knowing that government acceptance will give the cryptocurrency the backing it needs. In fact, India’s Bitcoin industry has long tried to popularize Bitcoin with strategies that include conducting security checks, requesting identification from users, such as government-verified address documents, Permanent Account Numbers (PAN) or Aadhaar IDs, and sometimes even checking bank details. Private Bitcoin companies have also launched an association, called the Digital Assets and Blockchain Foundation India (BFI), to educate lay people on Bitcoin benefits and usage. Government intervention credits their efforts.

On the other hand, experts wonder whether some of these intended regulations will harm Bitcoin in that government interference contradicts Bitcoin’s allure, while other rules may hamper the blockchain innovation and development.

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While the system is adopted in more than 70 countries, some countries rely on an alternative format.Countries that use IBAN: Most of Europe, the Middle East, and parts of Africa and AsiaCountries that do not use IBAN: The United States, Canada, Australia, and China. They typically use routing numbers.Final ThoughtsUnderstanding the IBAN meaning can help ensure that international money transfers are accurate, smooth, and secure. Using the correct IBAN helps avoid transaction delays, processing errors, and unnecessary fees. While IBANs ensure your payment reaches the right account, it's also vital to choose a reliable online money transfer service provider for the best exchange rates and lower transfer costs.Before sending money overseas, always double-check the recipient’s IBAN and compare transfer services to get the most value for your money. If you want to save on fees and get the best exchange rates, CompareRemit makes it easy to compare money transfer providers in real time.Whether you're sending funds to family, making business payments, or paying for overseas expenses, using the correct details—including the IBAN—can make the entire process smoother.Frequently Asked Questions About IBAN (FAQs)Q: Is IBAN a 16-digit number?An IBAN can be up to 34 characters long and includes both letters and numbers. The exact length varies depending on the country.Q: How to get a SWIFT code from an IBAN?It is not possible to directly get a SWIFT code from an IBAN. These are distinct codes serving different purposes. You will need to find the SWIFT code separately—either from your bank's website, account statements, or by contacting your bank directly. Q: What if the IBAN is wrong?If you enter the wrong IBAN, the transaction may be delayed or canceled. In rare cases, it could even result in your money being sent to the wrong bank account.Q: How long does an international transfer take with an IBAN?International transfers using an IBAN typically take 1–5 business days to process. The exact timing depends on factors such as intermediary banks involved, your bank's daily cutoff times for processing transactions, and the efficiency of the recipient's banking system.Q: Can I create IBAN for multiple currencies in the same account?While you cannot create multiple IBANs for a single bank account (since each IBAN is a unique identifier for one specific account), many banks now offer multi-currency accounts. These accounts allow you to send and receive different currencies through a single IBAN.Q: Can I use my IBAN for receiving money from abroad?Yes, you can use your IBAN to receive money from abroad. The IBAN ensures that funds are accurately sent to the correct account.

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