After years of operating without clear regulatory frameworks, self-regulated bitcoin exchanges and businesses will most likely be introduced to a new set of regulations and policies by the Indian government in the next few months.
Ever since the launch of Bitcoin in 2009, analysts and experts have stated that largely unbanked countries such as India present a potentially massive market for bitcoin. India has about 800 million unbanked citizens whose financial ecosystem and system worsened as a result of the Indian Prime Minister Narendra Modi’s decision to demonetize the widely used 500 and 1,000 bank notes.
The removal of the two banknotes led to nationwide financial turmoil and instability. Hundreds of millions of citizens have struggled to obtain cash to fund day-to-day operations and purchase necessities. India’s financial system deteriorated further when the country’s ATMs began to run out of cash.
According to State Bank of India (SBI) deputy general manager Ajoy Kumar, more than 90 percent of ATMs in India have no cash to dispense, and around 70 percent of ATMs in three districts are out of cash.
“Nearly 70 per cent of our 648 ATMs in the three districts are out of cash. The rest will also become dry in the next few days as we do not have cash to refill the machines. We are helpless from our side,” said Kumar.
While the state-supported monetary system has declined and demonstrated a high level of incompetence over the past few months, the demand for bitcoin has been on the rise. Major bitcoin exchanges including Zebpay and Unocoin have experienced huge mid-term growth in their trading volumes and user base.
Sunny Ray, co-founder of Unocoin, wrote:
“It took two years and ten months for Unocoin to reach 100,000 users. It only took another six months to reach 200,000