Kataryna Kovtun June 2, 2020
The growing demand for cryptocurrencies in India is due to the need for lower fees for money transfers and more stable currency to store value.
The cryptocurrency site and derivative exchange OKEx, in collaboration with Coinpaprika, studied Indian cryptocurrency markets and estimated that the global share of cryptocurrency transactions in India will increase significantly over the next two years.
Why do Indians need a less expensive payment system?
Beyond borders, more than 17 million Indians work, sending more than $ 80 billion home in 2018. They paid $ 5.67 billion in transaction fees to intermediaries involved in the settlement of the transaction.
High transaction fees are forcing Indians to look for alternative ways to send money back to their country. The report says that with easing restrictions on the use of cryptocurrency, India could soon become the next Mexico. There, Bitso’s cryptocurrency exchange has already captured more than 2% of the US-Mexico money transfer market.
Since the Supreme Court decided to lift the ban on cryptocurrencies at the Reserve Bank of India, activity in the cryptocurrency trade has increased in the country. OKEx visits from India increased by 545.56%, while the number of newly registered users from India increased by 4 100% in the first quarter of 2020.
Cryptocurrencies in India Help Avoid Currency Rules
Another major problem facing the Indians is the unstable price of the Indian rupee against the US dollar. It has fallen by about 7% since the early days of the coronavirus pandemic. It is also difficult for Indians to exchange Indian rupees for a more stable currency due to complex currency rules.
This is another reason why Indians are switching to Bitcoin (BTC) and other cryptocurrencies to exchange their funds. However, the report says, they mainly use cryptocurrency as a way to switch to a more stable fiat currency.
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