Bitcoin is steadily gaining popularity in many parts of the globe, particularly in India. And the government’s recent decision to demonetize two currency notes is helping speed up the popular digital currency’s traction in the country.
To crack down on corruption, fake currency notes and tax evaders, the Indian government made a historic move last week and banned currency notes of 500 and 1,000 denomination. Prime Minister Narendra Modi announced the move in a “shock and wave” manner so black market savers didn’t have enough time to do something about it, local media outlets reported.
The announcement has, of course, resulted in people standing in line at banks to exchange or deposit the scrapped rupee bills—a staple in ATMs in the country. And as the ATMs start running out of money, it could pave the way for an increase in demand for bitcoin in India.
In an interview with the EconoTimes, Sathvik Vishwanath, CEO of bitcoin company Unocoin, said he believes the ban could boost bitcoin adoption in the country.
“I believe the adoption rate and bitcoin trading in India will dramatically increase. This will not happen overnight or within a week, as Indians are currently recovering from the shock of the discontinuation of the 500 and 1000 rupee notes. Once everything is settled, I am predicting an upward trend starting from next week,” Vishwanath said, according to the news outlet.
Zebpay bitcoin exchange, meanwhile, sees about 50,000 new users per month. Zebpay co-founder Sandeep Geonka told Investopedia: “More people have started looking at bitcoins and interest has surged. We are working hard so that bitcoins and this technology can help fulfill the government’s dream.”
The Reserve Bank of India has been looking at possible solutions to reduce the use of paper currency in the country. In June, the bank said it was forming a committee that will study the use of blockchain for “financial transactions where the entire data systems move to some more levels.”
Current bitcoin price and trade volume
The price of bitcoin is hovering around $711 early Wednesday morning, with a trade volume of $6.04 million.