By Adam Alonzi
Recently the rupee has hit a record low in relation to the dollar. While a weak national currency is not inherently bad, in this instance it is a formidable obstacle to prosperity. Importing consumer goods and capital goods is becoming increasingly expensive and the rupee’s relation to the Saudi riyal and the Russian ruble is having an indisputably deleterious effect on the Indian economy.
India produces approximately 1.04 percent of the world’s oil, but that is not enough to satisfy domestic needs. A weak rupee encourages exports, however, Indian consumers and businesses demand foreign goods. This, coupled with fears of inflation, may compel consumers to seek out alternatives to the rupee.
14 million people in Kenya have Bitcoin wallets. There are more Bitcoin wallets than bank accounts in Kenya. Kenyans, understandably, do not have faith in their country’s fiat money. While the rupee is not entirely comparable to the Kenyan shilling, it is possible, even probable, that Indian consumers will begin buying precious metals or Bitcoins to protect their earnings.
At the moment there are regulations set by the Indian central bank that put Bitcoins in a legal gray area. Purchasing them with rupees, dollars, euros or yen is problematic because “only banks which have been permitted to provide Mobile Banking Transactions by the Reserve Bank of India shall be permitted to launch mobile based prepaid payment instruments (mobile wallets & mobile accounts).
However, this will not prohibit Indians from selling services or goods online for Bitcoins. It also only nominally prohibits the exchange of rupees for Bitcoins. In reality enforcing the law would be quite difficult. Populations worldwide are becoming disenchanted with the depreciating purchasing powers of their respective currencies. This sentiment is as strong in India as it is anywhere. Bitcoin may be a boon to India.
Adam Alonzi is a writer, biotechnologist, futurist, inventor, investor and programmer. He has had a lifelong fascination with history, economics and policy making. He is currently pursuing a degree in biochemistry and is the author of two novels: A Plank in Reason and Praying for Death. adam61803399@gmail.com