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India’s rupee restrictions are boosting demand for bitcoin

India’s rupee restrictions are boosting demand for bitcoin

India’s rupee restrictions are boosting demand for bitcoin
November 18
18:01 2016


India’s rupee restrictions are boosting demand for bitcoin

Luke Graham     | @LukeWGraham

Tuesday, 15 Nov 2016 | 8:44 AM ET

Indian Prime Minister Narendra Modi’s decision to withdraw 500 and 1000 rupee notes from circulation has sparked interest in bitcoin among India’s consumers.

Following last week’s announcement that the notes were no longer legal tender, sales volumes for bitcoin increased on several exchanges for the digital currency, according to The Hindustan Times.

The announcement by the Indian government was an attempt to crackdown on corruption and “black money”, but following the movement, internet searches for the term “buy bitcoin” increased in popularity, according to Google Trends data.

Other signs of increased interest include downloads of the smartphone app for bitcoin exchange Zebpay, which passed a threshold of 100,000 downloads.

“Queries for bitcoins have gone up by 20 percent to 30 percent in the past couple of days,” Zebpay’s CEO, Saurabh Agrawal, told the Hindustan Times.

As a result of the increased demand, the premium paid for rupee-denominated bitcoin has widened.

One bitcoin on the Indian exchange Unocoin is worth 55,405 rupees, or $817.97, at the time of writing. Dollar-denominated bitcoin currently costs around $709.

According to Charles Hayter, CEO and founder of Crypto Compare, the premium at the start of September was just $20, or around 3 percent.

“Bitcoin is a sanctuary in emerging markets where knee jerk policy reactions are commonplace – India’s move on high value bank notes is just the latest in a string of poorly communicated & executed judgments,” he told CNBC via email.

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