The introduction of cryptocurrency has completely revolutionised the financial sector. It has given consumers and businesses access to a completely secure and fully anonymous digital payment method, without the use of banks or credit unions.
Cryptocurrency has been particularly popular in developing countries like India, because of its accessibility, affordability, and simplicity. Consumers and businesses have embraced its use, both as an investment product and for commerce.
But the real beauty of cryptocurrency is that it provides unique opportunities for developing countries like India. It helps growth by reducing transaction costs, boosting economic performance, increasing financial inclusion, reducing corruption, and providing several other benefits. Here is a closer look at the opportunities provided by cryptocurrency for India and other developing nations.
Financial Inclusion For Indian Consumers
While the number of Indians with a bank account has been growing in recent years, an estimated 191 million Indians over the age of 15 still don’t have one. This means they don’t have the ability to protect their money in a savings account and cannot access basic financial services like personal loans and credit cards.
Indians without a bank account are also precluded from participating in global commerce as they cannot send money overseas to make purchases. Additionally, because they can’t receive or deposit income via the banking system, their employment and business opportunities are limited.
Cryptocurrency completely replaces the need for traditional banks. It gives unbanked Indians the ability to securely store their capital, receive loans, make investments, pay for goods and services online, and fully participate in the global economy. The additional financial stability gained by using cryptocurrency can help many poorer Indians escape the poverty cycle.
Helping Small Merchants Benefit Access Global Markets
Commerce has become increasingly globalised and digitised over the past decade. Consumers can now easily purchase items from the other side of the world using the Internet.
While large companies have had the resources to take advantage of this change, it hasn’t been easy for small merchants. There are various overheads associated with operating digitally, including fees for payment gateways, point-of-sale machines, and currency conversions.
Cryptocurrency helps small merchants avoid the overheads associated with digitised financial services. Setup and transaction costs are extremely low and payments can be taken from consumers in any location. It is a very cost-effective tool for small merchants looking to participate in digitised or global markets.
Cryptocurrency Can Fuel Economic Growth
A huge amount of capital has been placed in the cryptocurrency sector over the past decade. Globally, there is about USD $5.5 billion in blockchain startups, which provide a wide range of products and services. There is also about USD $160 billion in currency in bitcoins alone.
Unfortunately, India has only secured a small amount of this capital inflow as regulators had placed a ban on cryptocurrency trading two years ago. Now that this ban has been lifted, the country can begin receiving investment inflows again from the sector, which provides an excellent opportunity for economic growth.
Making Transactions Immune From Theft
Although most Indians consider their financial sector to be relatively secure, it is not. There is theft occurring on a regular basis, as a result of data leaks, ransomware attacks, bank fraud, and criminal employees.
Cryptocurrency does not suffer from these types of vulnerabilities. It is a heavily encrypted and secure form of currency with transactions occurring between two parties. There are no bank staff to be worried about and no risk of fraud.
Avoiding Inflation And Other Currency Issues
The currency of developing nations tends to be very volatile. It’s common to see high inflation rates or rapidly fluctuating currency values on global markets. This presents a challenge for businesses and consumer alike.
Because cryptocurrency is global, there are no local currency devaluations which might occur when a nation’s economic stability changes. If India has a bad year economically which sends the value of the rupee through the floor, it won’t matter to anyone holding bitcoin. Likewise, if the inflation rate suddenly shoots up in India, cryptocurrency will not be unaffected.
This helps Indians hold onto the value of their capital when local economic conditions are calamitous or the value of the rupee is declining on international markets.
One of the main benefits of using cryptocurrency is its speed. Transactions are performed in a few minutes. By contrast, many Indian banks will take several days to complete basic transactions.
This incredible speed means that commercial transactions occur much more rapidly. Businesses can get paid immediately and deliver their products or services faster.
Purchases of all sizes are fast, which means large transactions that occur when buying a business, a house, or a car can be completed almost instantly and at a far lower cost. This will reduce overheads, increase economic activity, and boost the productivity of certain sectors.
Being On Par With Foreign Economies
Because India is a developing country, it has always been trying to “catch up” with western countries in terms of infrastructure, governance, finance, and so on. Cryptocurrency gives Indians an opportunity to have the same financial capabilities as the most advanced economies in the world.
Indian entrepreneurs will be able to innovate on equal footing with the best companies in Silicon Valley. Consumers and businesses will have full access to the global economy. The economy will run more efficiently, with fast, cheap, and secure transactions. Indians will be able to create digital assets and enjoy a financially secure future.