This is the year that eCommerce will see big development in India. Morgan Stanley Research reports a 50% increase from last year.
They rank India as the 10th largest economy in the world, with a forecasted GDP growth of around 5.5%.
The National Payments Corp of India is projected to make e-commerce dealings easier by enabling micropayments and person-to-person payments. They will use a unified payment interface (UPI).
In India, this UPI is one of many innovations taking place in the financial sector that will benefit the customer, and will help make India a cashless society, says Reserve Bank of India governor, Raghuram Rajan.
Mohit Kalra, CEO at Coinsecure, says to Cointelegraph:
"Bitcoin is a superior technology with a fully global, decentralized network connecting Indian citizens to individuals around the world. A key benefit of Bitcoin is the fact that it will not increase inflation. Bitcoin is a deflationary currency.”
However, Kalra notes that the UPI could increase inflation. As the NPCI takes steps forward, it is clear that a cashless society is the way of the future.
Kalra explains to Cointelegraph:
“We find that Bitcoin and blockchain technology holds much promise in a safe and secure way. While we see Bitcoin technology meeting the needs of Indian citizens through services like Coinsecure, we still recognize the merits of the NPCI to take steps forward towards a cashless society."
Bitcoin - currency of the future
Coinsecure now consistently handles over 3,000 BTC a month. They have seen investment of over $1.2 million from a group of private angel investors from India. This fund raise is part of its ongoing Series A round.
One of the latest Indian Bitcoin startups, Zebpay, has had investment of $1 million. India currently has around 50,000 Bitcoin enthusiasts, with 30,000 of them actually owning the currency. The resources will be used to sponsor the cryptocurrency in the country of over a billion people and for the setting up of a dedicated blockchain laboratory for research, so they will become a payment gateway.
Of late, corporations like Microsoft, Dell and Expedia are amongst a host of corporations that have begun to accept payments in Bitcoin. Central banks of various countries, including India’s Reserve Bank, have acknowledged Bitcoin as a currency of the future.
Danny Wettreich, Chairman & CEO of GreenBank Capital Inc, says to Cointelegraph:
”The Indian government is doing the correct thing moving towards a cashless society. The usage of digital payments using mobile phones will increase with UPI. This is yet another problem for the future of Bitcoin and its blockchain, as Bitcoin cannot process payments using mobile phones, as Bitcoin users are not identified.”
In contrast, GreenCoinX identifies all its users and already has the capability to make payments from one GreenCoinX wallet to another, using either a mobile phone number or an email address. If the future for cryptocurrency is identification, GreenCoinX has this capability.
Could the central banks use this technological knowledge without people realizing it?
According to Wettreich, users of mobile phones do not focus on the technology of mobile phone payments as long as it works. So the central banks could use the NPCI technology without people realizing it, and they will pressure the commercial banks to use the new UPI.
Wettreich explains to Cointelegraph:
“Usage of GreenCoinX will also become widespread as it is the cheaper alternative to the banking system. However, the other factor to consider is security. There have been a number of reports in India of the NPCI technology being vulnerable. If the mobile phone is lost by the user it is relatively easy for a stranger to hack into the user's bank account via his mobile phone. That cannot happen with GreenCoinX which has much more complex security protocols.”
An appropriate regulatory structure around Bitcoin will help increase adoption between merchants and shoppers in India.