Cryptocurrency in Emerging Markets :INDIA...

India is the world’s third largest economy, and is set to grow at a rate that may surpass that of China within a few years. In Prime Minister Narendra Modi’s vision of a Digital India, a lot of emphasis has been placed upon cultivating technology to solve the most rudimentary of purposes and tasks. This is a vision that advocates and strives to computerize everything a common man encounters daily. It has been heralded by the media as the genesis of the greatest technological revolution yet in the country. One of the first steps taken by the Modi government, in order to set the ball rolling for Digital India, was demonetization. Two of the highest denominations of bills in circulation, Rs 1000 (about $14.80) and Rs 500 (about $7.40), were discontinued and replaced with newer bills that incorporated tracking technology.

It’s like if the Fed were to say tomorrow that, effective immediately, the $100 and $50 bills are no longer in circulation, and will be replaced by newer bills. Since the old bills are no longer legal tender, people who have a lot of black money (income not reported/paid taxes on) will be out of that said money, since they can’t use it. They couldn’t even go to the banks and ask for it to be exchanged for the newer bills in circulation, because the Fed had put a threshold value on it depending on their income, and the threat of being flagged down by the IRS loomed large over their heads. The IRS would ask how these people have so much extra cash when they haven’t made a withdrawal this big recently. In India, these 2 scrapped high-denomination bills accounted for about 86% of the exchequer’s currency by value; in a country where about 90% of the transactions happen in cash, the economy slowly started to tank. There were also withdrawal limits put on the new bills in circular

The media narrative was that it was a masterstroke aimed at ridding black money in order to combat the problems of drugs, terrorism, and corruption. What happened in reality, though, belied the official narrative. The abrupt nature of the announcement, along with the shortage of new bills, brought about widespread panic and significant disruption to the economic output. Over 3 dozen people died from waiting in the extremely long lines at ATMs in the blazing heat. It was the poor and the middle class who suffered and lost their money, whereas the rich siphoned theirs off and found ways to beat the system through illegal and immoral means by converting their black money into white. Similarly, one of the salient features of Modi’s Digital India has been the push for a cashless society: A society where the use of technology is so far widespread in daily life, that it eliminates the need for carrying cash. This was a platform supported and backed by the private sector, by companies such as Pay-TM (India’s version of PayPal), Uber, etc. However, any person aware and versed in the dark arts of government propaganda will know better than to fall for that.

The media narrative was that it was a masterstroke aimed at ridding black money in order to combat the problems of drugs, terrorism, and corruption. What happened in reality, though, belied the official narrative. The abrupt nature of the announcement, along with the shortage of new bills, brought about widespread panic and significant disruption to the economic output. Over 3 dozen people died from waiting in the extremely long lines at ATMs in the blazing heat. It was the poor and the middle class who suffered and lost their money, whereas the rich siphoned theirs off and found ways to beat the system through illegal and immoral means by converting their black money into white. Similarly, one of the salient features of Modi’s Digital India has been the push for a cashless society: A society where the use of technology is so far widespread in daily life, that it eliminates the need for carrying cash. This was a platform supported and backed by the private sector, by companies such as Pay-TM (India’s version of PayPal), Uber, etc. However, any person aware and versed in the dark arts of government propaganda will know better than to fall for that.

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