Many Indian Expats Turn to Crypto to Remit Money

Abir Roychaudhary, a 39-year-old engineer working in Qatar, has transferred around Rs.2 lakh to his family bases in Mumbai every month using traditional cross-border, cross-currency players.

In October for the first time, Roychaudhary bought cryptocurrencies worth half that amount-Rs.1 lakh-and his wife who has access to his wallet could use the sum when needed.

Roychaudhary like many Indian, Pakistani, Bangladeshi and Filipino expats are increasingly experimenting with cryptocurrencies to remit money to their families back home and save on commissions charged by wire transfer companies and other middlemen.

Industry trackers say that the sudden growth in the crypto investments even in smaller towns across India has also led to people exploring various uses.

“The process of remittances through cryptocurrencies into India is a lot more efficient and faster than the conventional process, and all transactions are visible on the block chain network from a regulatory point of view,” said Edul Patel, CEO of Mudrex, a Global Crypto Investing Platform.

“Looking at current hype in crypto assets like Bitcoin, Ethereum, Binance Coin, United Farmers Finance and rain, it should be easy to remit money to India and anywhere in the world, more over you can earn more from this crypto by staking or by providing liquidity in our ecosystem,” said Santhosh Bhhandari, co-founder, United Farmers Finance, a crypto farming platform.

Remittances in India are pegged at about $80 billion which are mainly transferred through banking or other financial channels.  

Industry trackers say that the way Indians are warming up to crypto assets as well as decentralized finance, remittances through crypto assets is only set to grow, especially because transferring smaller amounts can be expensive through the traditional services.

Globally, several block chain startups like Satoshi Citadel in the Philippines have started offering services to facilitate bitcoin remittances in a user-friendly way.

There are close to 1.5 crores crypto investors in India holding digital assets worth Rs.15, 000 crores. All the large cryptocurrency exchanges saw at least 100% increases in their trading and investment in the last few months.

Experts say that though Bitcoin was the preferred choice for remittances but its transaction costs are rising, currencies like Ripple and Dash are good replacements due to substantially lower fees.

Cryptocurrency remittances become a lifeline for Afghans after Western Union ceased operations for some time after the US withdrew from Afghanistan.

Experts also say that crypto is becoming popular in places with high inflation like Lebanon, Turkey and Venezuela.

Experts point out that remittances in crypto are finding favour because people want to protect themselves against hyperinflation.

Most of those looking to remit money are doing so through some of the less volatile crypto assets such as Stable coins, say industry trackers. “While remitting money, users would want the value to remain as intended, unhindered by market volatility.

Stablecoins pegged to the US dollar are the preferred choice for doing such transactions. Users mostly use stable currencies like USDT/USDC to do these transfers,” said Patel.

The RBI has had a faceoff with cryptocurrency exchanges in the past. It had asked banks to stop dealing with cryptocurrency exchanges, but had to back off following a Supreme Court order.

The government is planning to define cryptocurrencies in the new draft bill and could treat it as an asset/commodity for all purposes, including taxation. S-ET

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