Bitcoin adoption in India is gaining momentum, will it surpass China to become number one?

Several new developments in Bitcoin are pointing to India, a populous country that is becoming the next big focus for Bitcoin. The country is creating untapped opportunities for hundreds of millions of people.

Internet usage surges in India

India has surpassed the United States to become the world's second-largest Internet market, with 333 million Internet users, while China has 721 million.

While this is a positive development, according to a new report from the United Nations Broadband Commission, six countries – including China and India – together account for 55% of the world’s non-internet population, due to their sheer size. In other words, in countries like India, there are still a lot of people who don’t have access to the internet.

Developments in India could soon have a slight impact on China’s participation in bitcoin trading, especially if the yuan depreciates.

Bitcoin is already big in India

Kumar Gaurav, CEO of blockchain remittance company Cashaa, said India is definitely one of the emerging markets for Bitcoin and other cryptocurrencies for obvious reasons such as a large young population, increasing smartphone and internet penetration, and a large market that attracts investors and entrepreneurs.

He said:

“India has the largest number of engineers, which gives us a large market that can quickly adopt technology products. Bitcoin is one such product. But I also see some challenges in India, such as an already mature central banking system. In order to make way for cryptocurrencies in India, companies need to sell products based on the advantages of cryptocurrencies, rather than cryptocurrencies themselves.”

Looking at the touchingly optimistic future of Bitcoin in the world’s second most populous country, Coinsecure CEO Mohit Kalra said Bitcoin is already big in India.

He noted:

“I think India is already a huge market. In the past, all Bitcoin transactions were done offline, mainly through personal contacts or by finding people on forums, which was very tricky because you didn’t know each other, and it became a very risky thing. Now all transactions have moved online, and buyers and sellers don’t have to worry about who they are trading with because exchanges like us will do due diligence. At the current rate of development, it won’t be long before India reaches the level of Bitcoin development in China. I think India still needs more miners to produce Bitcoin so that India does not need to rely on other countries for liquidity.”

India retains world's top spot in remittances

Increased internet use has quickly reflected in the structures available to Indians for sending money domestically and internationally. According to data released by the World Bank, India was the world’s largest recipient of remittances in 2015, although the volume fell by $1 billion from the previous year.

Despite a 1.7 percent contraction in global remittances, from $592 billion in 2014 to $581.6 billion in 2015, the World Bank said India received about $69 billion in remittances last year, while China received $64 billion, the Philippines $28 billion, Mexico $25 billion and Nigeria $21 billion.

There is a big gap in remittances between China and India

Despite China's larger economy, more internet users, higher incomes and so on, India is a bigger recipient of remittances than China for statistical, historical and cultural reasons, but mostly economic ones, said Dilip Ratha, director of the World Bank's migration program.

He also said that although India and China together receive more remittances than the next five countries combined, and both countries have large overseas workers, India sends more remittances because their relatives need the money, unlike Chinese families who do not need to rely on remittances to survive. Instead, they are more likely to send money home to invest in some business. This leads to another reason: the "remittance recession" - the amount of money that migrant workers send back home tends to shrink as they are away from home for longer and longer, because their ties to home are weakened.

Ratha said this affects Chinese people abroad, but not Indians, who seem to be more connected to home. India also has a variety of overseas workers. They form the richest immigrant group in the richest country in the world (the United States), and India is still a very poor country, so there is a great need to send remittances back home.

The remittance gap between China and India will soon come into play as Bitcoin adoption scales in India.

Traditional remittance channels are a growing concern

Several informal channels for transferring money have flourished, largely because formal channels are too costly and India's domestic banks and money-transfer agents are too small.

In a sign of this, Indian Prime Minister Narendra Modi said at the G20 summit that India is now championing efforts to reduce the cost of remittances.

Ratha said the technology to provide affordable remittance services already exists, but regulators are still standing in the way of players who can introduce efficient technology to the market.

Bitcoin usage surges in the Middle East

The Gulf Cooperation Council (GCC) countries are the largest source of remittances to India as a large number of Indian migrants work in the region.

Recently, more Bitcoin-related developments have been made in the region. BitOasis, a startup based in Dubai but founded in Jordan, now has wallet services available in the Middle East, South Africa, Asia, UAE, Qatar, Kuwait, Bahrain and Saudi Arabia. The world's first Bitcoin-based oil market has been launched, and Bitcoin is becoming a great financial technology in the region.

Although remittances from the GCC to India fell 2.2% to $35.9 billion in the 12 months to March 2016, compared with the same period last year, according to Crisil, a Mumbai-based ratings and research firm under S&P Ratings. Its data shows that the UAE is the largest source of remittances from the GCC to India, accounting for 38.7%, followed by Saudi Arabia with 28.2%.

The use of Bitcoin in India is growing with the promotion of some projects.

Amazon is pushing to become one of the leaders of e-commerce in India. Purse.io allows users to use Bitcoin to purchase discounted items on Amazon, using the company's 'Name Your Discount' program, users can enjoy discounts of up to 22%. In addition, users can use the Indian exchange Unocoin to buy Bitcoin and enjoy discounts when using Bitcoin to purchase food, clothes and electronic products.

Moreover, Bitcoin company Coinsecure recently announced a partnership with Oklink to jointly provide blockchain-powered remittance services in India. Given that India is the world’s largest recipient of domestic remittances, this partnership will mark a huge milestone for Bitcoin and blockchain technology.

Mobile bitcoin exchange Zebpay says its iOS and Android apps have been downloaded more than 100,000 times in August.

However, whether India can surpass China in the use of Bitcoin depends on one’s own opinion. What do you think?