Bitcoin Forks or Bailouts? India Gives 1.3% of GDP in Free Cash to Banks
India is to bail out its banks with cash equal to 1.3% percent of its GDP or $32 bln.
Bitcoin holders are not the only ones getting free money this quarter as India prepares to inject $32 bln into its banks.
While exchanges in the increasingly important Bitcoin economy announce their perspectives on the Bitcoin Gold and SegWit2x hard forks, legacy finance is getting a “game-changing” government bailout to curb bad loans.
As CNBC reports quoting Goldman Sachs forecasts, India could see economic growth from the giant remedial package, which equals 1.3 percent of the country’s GDP.
GDP growth could rise “up to five percent” a year after the injection, the bank states.
India’s domestic financial institutions have been worrying investors increasingly in the past few years.
Earlier this month, prior to news of the cash surfacing, rating agency Fitch sounded the alarm about the future if banks were not more strongly recapitalized.
"Fitch believes the government will have to pump in significantly more even on a bare minimum basis (excluding buffers) if it is to address the system-related risks of a huge NPL (non-performing loan) stock, weak provision cover and poor loan growth," it said.
Meanwhile, Aswath Damodara, New York University’s so-called ‘Dean of Valuation’ has said he considers Bitcoin a currency and that he is “OK with” its price being at or just over $6,000.
"I think the better path for Bitcoin is to actually make it a digital currency, a currency that you and I can take on our travels and use actually to buy stuff and sell stuff. If that happens, then I'm OK with the pricing," he told CNBC Tuesday.