Bitcoin, a currency that is immune from governmental controls is seeing plenty of interest in India, a country still reeling from an unprecedented cash crunch that sees over a billion people face government-imposed limits on ATM and bank withdrawals.
The move to demonetize 500 and 1000 rupee banknotes – a month ago to this day – meant that 86% of Indian cash in circulation was rendered obsolete overnight. The comprehensive reform sees everyday Indians’ lives disrupted as the Indian government struggles to replace old banknotes with new notes in the face of soaring demand. While the government is pushing its agenda toward digital banking and cash, a growing percentage of the population is turning to bitcoin as a safe store of value.
Zebpay, a prominent Indian bitcoin exchange now sees 200,000 registered users in its trading platform, with 50,000 new users added last month in November. Adding a quarter of its userbase since last month’s demonetization alone, Zebpay is forecasting further aggressive growth in the coming months.
Speaking to MoneyControl, Zebpay co-founder and COO Sandeep Goenka explained:
The rise in bitcoin price usually dies rather quickly, but this time it is sustaining, which could be because of the added interest due to demonetization.
Further, the surge in bitcoin trading is telling. Zebpay saw a total of 100 crores in rupees (approx. $1.48 million) throughout the entirety of the financial year of 2015. With considerable contrast, Zebpay saw 75 crores in rupees (approx. $1.12 million) in bitcoin trading last month in November alone, Goenka revealed.
While the Indian government does not wield any regulatory oversight upon the nascent bitcoin industry regionally, Goenka believes that regulation is likely to occur in 2-3 years, following the example of countries like Japan, Singapore and the USA. Until then, Zebpay implements a KYC process of identification before allowing users to trade on its platform.
“India has a growing interest in bitcoin as an investment, commodity, and technology,” Goenka added, speaking to Zeebiz.”The bitcoin and blockchain community are working hard to help India go cashless.”
The biggest hurdle with adoption, much like any other country in the world, is to educate the masses about bitcoin, according to the bitcoin executive, who stated:
The biggest challenge has been trying to explain this revolutionary technology to regular people.
Zebpay is reportedly in talks to raise $4 million in equity funding during a time when its competitor Unocoin raised $1.5 million in late September, a record for a bitcoin company in India.
Meanwhile, peer-to-peer bitcoin trading India has never been higher, despite the soaring premiums on the cryptocurrency, a consequence of supply not meeting demand in the country.
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