Roychowdhury bought for the first time in October cryptocurrency Half of that amount – ₹1 lakh – and his wife who has access to his wallet can use the amount if needed.
Like many Indian, Pakistani, Bangladeshi and Filipino expatriates, Roychowdhury is experimenting with cryptocurrencies to send money back home to their families and save on commissions charged by wire transfer companies and other middlemen.
Industry watchers say that the sudden increase in crypto investments, even in small towns across India, has prompted people to search for different uses.
“The process of remittances via cryptocurrencies in India is much more efficient and faster than the traditional process, and all transactions are visible on the blockchain network from a regulatory standpoint,” it said. Edul Patel, CEO of Mudrex, a global crypto investment platform.
“Given the current hype in crypto assets such as Bitcoin, Ethereum, Binance Coin, United Farmers Finance & Grain, it should be easy to send money to India and anywhere in the world, the more you can earn more from this crypto or by providing liquidity in our ecosystem,” said Santosh Bhandari, Co-founder, United Farmers Finance, a crypto farming platform.
Remittances in India are estimated to be around $80 billion which are mainly transferred through banking or other financial channels.
Industry watchers say that with the way Indians are warming to crypto assets as well as decentralized finance, remittances through crypto assets are only set to increase, especially because transferring small amounts of money is more difficult than traditional services. Medium can be expensive.
Globally, several blockchain startups such as Satoshi Citadel in the Philippines have started providing services to facilitate bitcoin remittances in a user-friendly manner.
There are around 1.5 crore crypto investors in India who have digital assets worth ₹15,000 crore. All the major cryptocurrency exchanges have seen at least 100% growth in their trading and investments in the past few months.
Experts say that although bitcoin was the preferred choice for remittances, with its transaction costs rising, currencies such as Ripple and Dash are good replacements due to their significantly lower fees.
Cryptocurrency remittances became a lifeline for Afghans after Western Union briefly ceased operations after the US withdrew from Afghanistan.
Experts also say that crypto is becoming popular in places with high inflation, such as Lebanon, Turkey and Venezuela.
Experts point out that remittances are gaining favor in crypto as people seek to protect themselves from hyperinflation.
Industry trackers say that most of those looking to send money are doing so via some less volatile crypto assets such as stablecoins. “While sending money, users want the value to remain stable, free from market volatility. US dollar-denominated stablecoins are the preferred option for making such transactions. Users mostly use stablecoins such as USDT/USDC to make these transfers. use,” Patel said.
RBI has had one-on-one encounters with cryptocurrency exchanges in the past. It asked banks to stop dealing with cryptocurrency exchanges, but had to back down following a Supreme Court order.
The government is planning to define cryptocurrency in the new draft bill and treat it as an asset/commodity for all purposes, including taxation.
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