Last Friday, The Reserve Bank of India issued a statement that “all entities under its regulation would have three months to cut ties with any service dealing in cryptocurrency.” Around the same time, The State Bank of Pakistan decreed similar regulations on banks and financial entities under their regulatory domain.
The global prices of cryptocurrencies moved little, but local exchange Coinome said that the local price of Bitcoin dropped more than $1,000 compared to the global price. It should also be noted that these regulations are not bans on cryptocurrencies since a ban would require legislative action. These regulations are only for banks and financial entities that must bow to the regulatory power of their respective central bank. However, it does significantly impact the bottleneck of exchanging fiat money for cryptocurrencies and vice versa.
A Change.org petition has thus far received over 20,000 signatures to influence the Reserve Bank of India and government to reconsider their crypto stance.
Cryptocurrencies still have strong legal use cases
Since cryptocurrencies have not been outright banned by India’s nor Pakistan’s legislature, and only limited in how banks can exchange fiat for crypto, their legal use cases still originate from individuals receiving income directly in cryptocurrencies and buying goods/services with said cryptocurrencies. This is a significant market in both India and Pakistan due to the limited bank account inclusion rates in both countries and India’s war on cash.
India has made significant inroads with bank account adoption since the last available ‘Global Findex Database” from the World Bank was published in 2014 and indicated that India’s bank adoption rate was at 53% of the population. However, India’s own recent governmental data indicates diminishing marginal returns on their initiatives. Pakistan had an even lower bank account adoption rate at 13% in 2014 with scarce recently available data.
The impact of the recent cash ban from Indian Prime Minister Modi has left many poor individuals to become more poor, without a bank account, and without a means to pay for many goods/services. In addition, elimination of money supply could create deflation, but could also create demand-pull inflation as many spend more expecting a possible surprise crackdown again in the future. For many individuals in India, a key feature of cash was how easy it was to purchase goods/services, but Modi has altered that dynamic.
The combination of crypto with bank accounts and other financial entities would have bridged a gap for many people in both countries, some of whom are the most in need of financial inclusion, but that is no longer possible. Luckily, where individuals used to be paid in cash, they can now be paid directly in cryptocurrency and use that cryptocurrency at a number of online and storefront merchants.
Dash has focused on everyday usability
Dash has teams campaigning around the world to get Dash accepted by more users and merchants. RocketPay recently started a campaign for wider Dash adoption by users and merchants in Asia and are even offering a Dash merchant solution. QuikWallet is heavily involved in India through central bank licensed activities and recently included Dash integration. While the recent news could be a set back, their merchant network of over 4500 online and brick and mortar stores is a positive sign of larger direct Dash adoption and exchange by merchants and users.
The incentives to use Dash are prevalent throughout India and Pakistan and Dash satisfies consumers with its unique structure of a trustless and decentralized currency that is able to financially sustain itself in the interest of its users. In addition, Dash has very quick transaction times and very inexpensive fees that make it competitive with cash. India’s rapid economic growth and hiccups along with Pakistan’s low banking inclusion rates make the two countries prime for larger Dash adoption as Dash awareness continues to grow.