India’s Legalization of Bitcoin could Transform the Country’s Remittance Market
In November 2017, the Supreme Court of India motioned the Finance ministry and other authorities to provide a framework with regards to the legalization of bitcoin in the country. Interestingly enough, the Reserve Bank of India and Securities and Exchange Board of India have both remained mostly silent on the matter and the little information divulged in the past few months was mostly done so by spokespersons in unofficial capacities.
Meanwhile, Indian bitcoin exchanges are flourishing in the vacuum of any new legislation. In September 2017, Zebpay, India’s most popular bitcoin exchange, announced that their app had been downloaded over a million times. It is very unlikely that India will declare any blanket ban on cryptocurrencies, especially since the RBI itself has indicated interest in launching a government-backed digital currency. That said, as we enter 2018, we will see more nations, including India, lay down proper frameworks for the regulation of cryptocurrency markets.
The legalization of bitcoin and other currencies such as ether in India will not change anything for those already engaged in the market, but the move could go on to transform the general public’s perception of digital currencies. It might trigger an acceleration in bitcoin adoption and increase nationwide acceptance of cryptocurrencies. In spite of the RBI discouraging the use of bitcoin as legal tender in India, individuals and companies can continue to use them as a payment method unofficially.
Japan was the first country to recognize bitcoin as a payment method legally and at the time of writing, remains to be one of the only few countries with a clearly defined, official law on the matter. Korea, Russia, and the United States have so far only announced plans to regulate the use of cryptocurrencies. Certain other countries, most notably China and Vietnam, are apprehensive instead, with the latter declaring a flat-out ban on all digital currencies.
The Philippines, another country that legalized bitcoin as legal tender, has seen a large number of people turn to the cryptocurrency to facilitate remittance payments. For foreign expats or workers who rely on cross-border transactions, bitcoin offers faster settlements and lower fees in contrast to traditional banks.
Coins.ph, the largest digital currency brokerage in the Philippines, saw millions of users sign up in the wake of bitcoin’s legalization and currently has around three million users. It is estimated that a significant amount of cryptocurrency volume in the country is due to remittance transactions flowing in and out of the country.
India’s remittance market is even larger than that of Philippines and according to a report published by World Bank, is the top remittance receiver country in the world.
It is entirely plausible that once laws and regulations pertaining to the legality of the cryptocurrency is finalized, Indians will adopt bitcoin as the de facto payment method and will ultimately, embrace it as a means to facilitate remittance. If that turns out to be true, bitcoin will yet again flex its strength as the definitive decentralized alternative to fiat currency.