Could Indian remittances bring us out of 'crypto winter?'

26 Dec, 2018
by Arthur Sillers
Opinion
Could Indian remittances bring us out of 'crypto winter?'

Crypto’s best marketplace for growth might be Indian international money transfers, but India is also one of the least friendly governments to crypto. Can developers there convince the government to change their tune and pull crypto out of its slump?

In an interview with News.Bitcoin, the CEO of Wazirx, Nischal Shetty made it clear that interest in crypto in India is vibrant and growing. Shetty claimed that its user base has been ‘hitting new peaks in volume every month,’ and 302 BTC were traded last week.

Shetty went on to say that, ‘whenever there’s volatility people forget the problems and start trading’ indicating an intense interest in crypto trading.

India in particular also represents a unique opportunity for crypto profits because of the huge number of international fund transfers to India from those who have moved to another country, and return funds to their families.

The World Bank has shown that remittances are on the rise, and in 2017 Indian ex-patriates topped the list with $69 billion sent home. As Indians immigrate to other countries to take advantage of higher wages, education, and opportunities for income, they often send a portion of that income home in the form of remittances.

Remittances traditionally are made using services like wire transfers, which charge a portion of the payment. For this reason, if cryptocurrency could find a way to provide cheaper intercontinental payments, it would find a huge pool of currency ready to be put on the blockchain. 

Read more: Facebook is launching a cryptocurrency to tackle remittance market 

CoinTelegraph recently interviewed the CEO of Atom Solutions, a crypto remittance firm which is developing a suite of financial products to not only take advantage of cheaper crypto-empowered international money transfers, but which keep crypto values stable, so that users feel confident in sending money in this manner.If these problems can be ironed out, international money transfers using crypto would be an extremely attractive alternative to current options. According to a report by Clovr, already more than 15% of remittances are sent using cryptocurrency, and if firms like Atom Solutions can improve the infrastructure, this figure will only rise.

While on the one hand, India is the perfect place for crypto to develop, and is one of the only marketplaces where crypto could actually provide an economically viable product, Indian regulators are not crypto-friendly. Indian Government officials are currently under to decide on a potential blanket ban on crypto trading, and recently a government research panel concluded that cryptocurrencies should all ‘be treated as illegal.’  

Read more: Indian authorities shut down country's first cryptocurrency ATM

The Indian government has yet to make official designations, but the Indian government hasn't been friendly to crypto before, and there is still a de facto ban on crypto trading until the law gets settled.

Nonetheless, Shetty indicated that he is optimistic, stating  ‘I believe in our government, that they’ll listen to our voices.’

Another important factor is the question on whether or not a national ban can really stop crypto remittences effectively getting into the hands of Indians. While a crypto ban would certainly chill the adoption of crypto in India, if residents are sufficiently motivated, it seems unlikely that there won't be a crypto payment infrastructure, at which point the Indian state will likely want to legitimize it in order to gain access to a portion of the profits.

Indian remittances could represent one of the first substantial and lasting sources of profit for crypto, and in this way could pull the rest of the market out of the ‘crypto winter.’ For this reason crypto should keep their eyes on the Indian government’s decision and the future of trading, remittances, and crypto in India.

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