Cryptocurrency in India. In India, cryptocurrencies are becoming more and more popular. Here’s a quick look at things that will affect how people feel about and want to use this exciting and sometimes controversial technology.
From ban to boom
The Reserve Bank of India (RBI) imposed a ban on cryptocurrency trading in April 2018. Banks and other financial institutions could not provide services related to virtual currencies due to the ban. The RBI’s goal was to safeguard Indians from crypto fraud. On March 4, 2020, the Supreme Court of India overturned the ban. The Court said the ban was against the Constitution because RBI had gone beyond what it was allowed to do by imposing it. This critical decision gave crypto trading in the country new life. Since March, trading volume and new customer registrations have increased steadily on several Indian crypto exchanges, including Wazirx and Unocoin. During April and May, crypto trading from India increased by 546% on Olex, a Hong Kong-based exchange. According to many analysts, India will soon have one of the fastest crypto markets in the world.
The official word
The Indian government does not forbid the use of digital currencies in the country, according to a clarification made by the upper house of the Indian Parliament in March. Later, the government said that cryptocurrencies are not legal tender in India. However, people who make money from trading in cryptocurrencies are subject to taxation. The Indian government is developing a regulatory framework for the use of cryptocurrencies. An Inter-Ministerial Committee (IMC) was established to examine all facets of crypto. In July 2019, the first draft of a legal framework was presented. It suggested making the sale, issue, transfer, mining, and use of cryptocurrencies illegal.
High remittance fees
India is the world’s top remittance recipient country. More than 17 million Indian migrants lived abroad in 2018, according to the World Bank. In the form of remittances, they sent India $78.6 billion. Remittances rose 5.5% to $83.1 billion in 2019. For developing nations like India, remittances remain a crucial income source. However, the high costs of sending remittances are an issue. Remittance fees totaled $5.67 billion in 2019 from senders of money to India.
Remittances via crypto
Cryptocurrencies could be a cheaper way for Indian migrants to send money home. The crypto route is a relatively easy way to send a remittance to India. A crypto exchange like Unocoin or Zebpay requires the sender to open a digital account. The recipient must also open an account with the same exchange. This requires KYC checks, after which the crypto accounts are linked to your regular bank accounts. To send money to your family, buy bitcoin on an exchange and transfer it to the recipient.
The money is credited to the beneficiary’s Indian bank account when they sell the bitcoin.
To buy or sell bitcoin on Unocoin, a fee of 0.7% is currently applied. According to the World Bank, rural India’s post office and bank remittance fees range from 7% to 11%. Reducing the cost of remittances globally to less than 3% is one of the Sustainable Development Goals of the United Nations. The use of cryptocurrencies for international payments can aid in achieving this objective.
Since the COVID-19 pandemic began, the Indian rupee has lost 7% of its value against the US dollar. As the rupee falls in value, Indians seek safer ways to save money. Many people view cryptocurrencies like bitcoin as such a choice. However, crypto’s real potential in India is to reduce the cost of international money transfers. India is a market that cares a lot about prices. In this enormous market, cost-saving solutions quickly gain popularity.
About the Author:
Hemant G writes for Sparkwebs LLC, a Digital and Content Marketing Agency, as a contributing writer. He enjoys traveling, scuba diving, and watching documentaries when he’s not writing.