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A Look at the Future of Cryptocurrency in India

The date is December 31, 2018. The world is getting ready to celebrate New Year’s eve with their friends and family. The celebrities in India are partying in private houses and sharing the happenings on Instagram. Social media use has increased exponentially. Everyone is looking forward to 2019 after an exhaustive 2018. Hoping that the New Year will bring in new possibilities, possibilities that won’t be curbed by the Government. No one has forgotten the decision on Cryptocurrencies, taken by the RBI.

Yes, all Indian exchanges have either turned to a Crypto-Crypto model and moved out of India or shut down. There is not a single exchange registered in India. The big guys with funding from foreign venture capitalists have moved to Crypto friendly countries and are serving as global exchanges. Indians are left with no legal way to buy Bitcoin with INR. But it hasn’t stopped them, Indians have been trading Bitcoin and earning out of it.

Peer to Peer exchange volumes have soured high. Bitcoin is at $30000 and yet the demand doesn’t seem to be slowing down. A whopping 25% of Open order book exchanges in India moved abroad and rebranded themselves as P2P exchanges. Indians are now buying and selling Bitcoins with cash in India. Telegram groups have been created to facilitate Cash transactions for buying and selling Bitcoins and other cryptocurrencies.

It was difficult initially. Banks had shut down accounts of people who traded in Bitcoin, even individuals when they were found to have bought Crypto on P2P exchanges. Everyday the newspaper would read “So and So bank closes so and so number of accounts”. The skeptics thought this was the end that they always predicted. Until one day we stopped hearing about Banks closing accounts.

Apparently, the residents had started trading Bitcoins for cash and vice versa. The banks were voted out of the system by the citizens themselves. RBI could not find the traders. Everyone knew Bitcoins were being traded by cash. But no one ever got caught.

Fast forward to today. The Income Tax department is quiet. The police is quiet. They are well paid. Bitcoin prices have gone up by 500% in 6 months. The bribe they are being paid is huge but it doesn’t matter. Indians are sitting on a pile of Cash earned from Bitcoin trade. The cash is not just INR, it’s in all major Forex.

Why can’t the authorities do anything about it?

We are talking about virtual currencies that cannot be traced. The ones who are not bribed are scratching their heads on finding a way to trace Crypto addresses. Every now and then we hear about a few crores of cash and a few bitcoins found from an individual. The news dies down. No one bats an eye, like no one does with news about Blasts in Syria.

A lot of developed nations have accepted Crypto as a currency and some of them are even accepting taxes in cryptocurrency. Ofcourse a majority of altcoins are now dead-assets. That happens every year. Roger Ver is still calling Bitcoin Cash the original Bitcoin, but unfortunately there are lesser and lesser takers of that Argument. Even when Bitcoin’s lightning network failed to go mainstream, the community supported Bitcoin with all their heart.

Back in India, one of the ministers from the opposition has been campaigning to make Crypto trading legal. To curb this black money menace. He is right. He is educated. The man understands Blockchain. But who’s listening to him? Under the finance bill, it is okay to accept Political Donations anonymously. The Crypto Hodlers are already paying the Government Babus in Bitcoin. The lobbyists have found an easy way to fund political parties. No one now wants to legalise Crypto trading.

Media houses have stopped reporting about Bitcoin and cryptocurrencies. The elections are the priority for them right now. Ah, the elections. Like we care about them. Worldwide blockchain in being adopted in some form or other for elections. But in India, blockchain technology adoption is slow. For Blockchain is nothing without a consensus. It is just another centralised system with no incentive for people to run it. When people don’t join in, its hardly a distributed ledger.

One might wonder what happened to the Digital Rupee that RBI was planning to launch. Well, much like the committee the government setup back in March 2017 to come up with recommendations for regulation of Crypto – the committee setup by RBI for feasibility of Digital Rupee has not yet come up with any report. Maybe RBI has given up on them.

The RBI repeatedly warned against the use of Crypto, but its a bull run, everyone is enjoying profits and have learned to ignore the central bank.

Its a dirty picture but seems like everyone is happy. The small shop owners are piling up cash. Some are secretly accepting Bitcoins. Its a chain. 50% of the sourced raw materials are paid through Cryptocurrency, leaving no trail of the purchase. The finished product from this is then sold off to whole-sellers in Cryptocurrency. The same material reaches consumers who are willing to pay in Crypto. Everyday hundreds of thousands of payments are done in Crypto and the government cannot do anything about it.

It seems like a whole parallel economy that was cash, now has another parallel economy that is cryptocurrency. But no one will acknowledge it. “I don’t have any bitcoins, stupid government banned them”, is what someone will say to you, while secretly holding a bag of alt coins and bitcoin. Everyone is happy, only the salaried are paying taxes, but they have bitcoins too. The country is still running on a deficit Financial Budget.

The whole economy has become more trustworthy then ever. Anonymous telegram users are making deals with each other. Agents are facilitating cryptocurrency trade with individuals from any corner of the country to another individual in any remote corner of the country. Its like the wild west, only more tech savvy.

As I said, the cops are paid for, the Income Tax department is paid for, and the babus and bureaucrats are paid for. In nothing but crypto. One would argue that RBI’s move to prohibit banks for doing business with Crypto exchanges back in April is a reason for this. I would say they might be right. The exchanges at the time were willing to share the data of every transaction done on their exchange. They were rooting for regulations. But RBI went the other way. Now they are paying the price. Indians have found a way, we always do.

Back to Instagram, you won’t find pictures from hodlers today. While the world is celebrating, they are preparing for the Bitcoin prices to fall. They have been falling every January, the research says.

Disclaimer: This dystopian piece of literature is written as fiction with no hopes of it coming out to be true. Any similarities you may notice with person or situation are purely coincidental. 

Read more:

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