India Bans Its Largest Fiat Currency Notes

[Kakmakr]

Hello There,

India bans top currency notes such as Rs.500/- and Rs.1,000/- to prevent black money. Now there are only three notes in circulation Rs.10, Rs.20 and Rs.50

http://www.thehindu.com/news/national/live-narendra-modis-address-to-nation/article9320548.ece

Google for more news links.

Yes, There are some preventive measures taken to deal with the situation but still it is one of the masterstroke by India prime minister Narendra Modi against black money.

How do you see this action and what kind of impact this will create on the bitcoin in India?

Best
Dudeperfect

I live in India, there are 4 notes in circulation now, Rs. 10, Rs. 20, Rs.50, and the Rs. 100.

The new notes will come in circulation from the Jan of 2017.
We just have to wait till then.

Glad to hear from a local perspective. ^smile^ How would this influence your decision to buy more or less bitcoins now? I cannot see how this will have any influence on people's decision to buy other currencies. Yes, they might have to settle for smaller denominations, but this will suit the poor people better, because they seldom use the larger notes.

Would like to hear your take on this. ^smile^

[LilibethSantos]

So are these notes impossible to deposit into banks now? I feel sorry for the Indians hoarding cash.

[jayvictor]

Hello There,

India bans top currency notes such as Rs.500/- and Rs.1,000/- to prevent black money. Now there are only three notes in circulation Rs.10, Rs.20 and Rs.50

http://www.thehindu.com/news/national/live-narendra-modis-address-to-nation/article9320548.ece

Google for more news links.

Yes, There are some preventive measures taken to deal with the situation but still it is one of the masterstroke by India prime minister Narendra Modi against black money.

How do you see this action and what kind of impact this will create on the bitcoin in India?

Best
Dudeperfect

Now all of these are small notes.so if you are going to buy 5,000 worth of goods,you will need to carry loads of 50's in your wallet and if you are going to buy something worth 50,000 now you need to carry a basket or a check to do that I hope it will not happen here in our place.

[Juggy777]

This was going to happen, the Indian PM was bound to do it. This will create a bit instability for a while, though it's good that he's doing it, this won't be the last, soon digital locker systems will come and Indian can open the it under supervision. Now coming to Bitcoin, this is perfect opportunity for it. The people should buy as much as they can and keep it away. This is not regulated and can't be banned. Go. For Bitcoins and be happy.

[newIndia]

I live in India, there are 4 notes in circulation now, Rs. 10, Rs. 20, Rs.50, and the Rs. 100.

The new notes will come in circulation from the Jan of 2017.
We just have to wait till then.

This is WRONG. New INR 500 & INR 2000 notes will hit ATM in November only. I have information that they have already been sent to bank chests. Government of India is trying its best to heal the pain of common people.

[jtipt]

Hello There,

India bans top currency notes such as Rs.500/- and Rs.1,000/- to prevent black money. Now there are only three notes in circulation Rs.10, Rs.20 and Rs.50

You missed the Rs.100 note , the most important note currently for these few days. I am an Indian myself, and overall i like the step taken by PM, some people are angry because it would cause a major inconvenience for few weeks but this is huge step in reduing black and I believe that this would actually make some difference.

I live in India, there are 4 notes in circulation now, Rs. 10, Rs. 20, Rs.50, and the Rs. 100.

The new notes will come in circulation from the Jan of 2017.

You have wrong information my friend, the new Rs. 500 and Rs. 2000 notes will be available in ATMs and Banks from 10th November itself.

[aso118]

I feel blockchain kind of transparent system must be the right solution for getting rid against money laundry/black economy. I believe financial experts may find many new things from this kind of moves from a government. Lets hope for any possible support for bitcoin ecosystem from this.

Sacrifice privacy for the sake of preventing money laundering? You might just open up a lot of people to harassment from tax authorities.
Too much power in the hands of the government can lead to misuse.

[Tanic]

Well, i heard about stop printing little notes such as 2 or 5, in our country you already will not find this notes anymore. But now banks print higher price notes as 2000 and 5000. It's all happening cause money get cheaper. But that was the first time I heard about oposite process. I even don't know what to say on this point.

[DimensionZ]

The problem I see with that ban is low purchasing power of rupee. 1 rupee is currently worth $0.02 cents so 1000 rupees is roughly 15 USD.
I can't figure it out if government in India is being serious - how banning equivalent of banknotes in denominations of $7 and $15 will help them?

BTW - It is more Economy discussion than Bitcoin discussion, this thread should me moved to Economics section.

The way I am explaining this decision to myself is that the government think that banning the top priced banknotes will reduce the likelihood of bribes and corruption going around in the country because it would be more difficult to carry around suitcases full of cash. Now that these banknotes are out of circulation it would take people a lot of effort to pay the same amount of money with a lot of smaller bills thus making their actions very conspicuous and the offenders will be much more easily identified and apprehended.

[xdrpx]

There's a very wrong perception circulating around because of improper communication among people. India hasn't banned the Rs. 500 and Rs. 1000 notes. It's infact just made the old Rs.500 note an illegal tender and the Rs 1000 note is replaced now by a Rs. 2000 note (twice the value) all of this done for the purpose of handling corruption and black money holders and to force them to deposit their old notes in their bank accounts by providing their Tax identification card and/or other forms of identification.

The banks are making users fill a form indicating the deposit of their old currency note money to their bank accounts. This is done to force those people who've not paid income taxes for their income earned in India while receiving them in cash and storing them in their homes. A large percentage of these aren't accounted by the Income Tax department and is illegal as per law. Today and tomorrow the new Rs 500 and Rs 2000 notes are in circulation in smaller amounts in few ATM's and few open banks. By next month a larger percentage of those notes can be withdrawn from ATM's and banks. In a way it's restricting the poorer and those without plastic cards from spending more cause less funds would be available from ATM's or banks for them. Those who have debit cards or credit cards can easily spend. So it's the poor who would truly require Bitcoins, but ofcourse majority aren't literate and fortunate enough to be technologically competent to be involved in Bitcoin and to understand the risk of investing in it.

[jak3]

this action has really ut a little brakes on the black marketters or i should say only to the fake money makers because black marketers do not care about physical koney they are & even we are more developed then any country we keep our money vertually

[DimensionZ]

Oh I see now. So the government officials are trying to bait all of the tax evasion offenders to come out of the shadows and deposit their soon to be paper money bills and catch them red-handed. It's a very effective plan of action to be honest and this idea hasn't even crossed my mind lol. Get rid of the big bills and force people to show up at the banks, get them checked out and then release new, bigger bills. Smooth play, India  

[NorrisK]

Sometimes make me think that with bitcoin we are playing right into the hands of the movement to restrict our funds.
Crypto is perfect for governments if they control it and can take it away in one click or divvy up the funds between the elite.
Its funny how those attracted to bitcoin initially wanted less government and now it is starting to look like government is going at it the same for total polar opposite reasons.
There is also a trend of eliminating the lower coins and bills in some Countries to eliminate costs and weighing people down with change.
This always looked to me as a reason to over charge the customer due to not having the smaller change and rounding up.

Not really imo. While every transaction can be traced through the blockchain, it is next to impossible to prove certain addresses belong to a certain person.

Even if you need to "register" an address with the government, you can easily create more for whatever reasons.

The technology behind bitcoin may help governments and banks though.

[eaLiTy]

Hello There,

India bans top currency notes such as Rs.500/- and Rs.1,000/- to prevent black money. Now there are only three notes in circulation Rs.10, Rs.20 and Rs.50

http://www.thehindu.com/news/national/live-narendra-modis-address-to-nation/article9320548.ece

Google for more news links.

Yes, There are some preventive measures taken to deal with the situation but still it is one of the masterstroke by India prime minister Narendra Modi against black money.

How do you see this action and what kind of impact this will create on the bitcoin in India?

Best
Dudeperfect

I live in India, there are 4 notes in circulation now, Rs. 10, Rs. 20, Rs.50, and the Rs. 100.

The new notes will come in circulation from the Jan of 2017.
We just have to wait till then.

From tomorrow onwards you can get new currency of Rs 2000 from banks and ATM s will be offline even tomorrow as they will be updating the software regarding the change and more over people can change the old currency through banks as banks will be open even on sunday but there is a limit on how much you can exchange per day and it is limited to just Rs 4000 a day

[countryfree]

It's really scary when you think of it. I've got quite a few banknotes in my pocket, it's money but the government, with a snap of its fingers, has the power to make them worthless. So Indians will have to the bank, and explain where the money's coming from. And the more you have, the more questions there will be to answer. Is this a free world? I'm glad not to be in India!

[lottery248]

i am curious that why India would ban the 1000 notes, that's not even value $20 per. in that case when your spend your stuff in India, you pay bunch of rupee banknote.

[Doamader]

The havent ban anything they are improving the notes and raising their value, as stated above, this happened with Brazilian coin as well they changed the layout to prevent the dark impressions notes, the same way euro has raised their impression security with several things to prevent the dark printed money to circulate.

[eaLiTy]

It's really scary when you think of it. I've got quite a few banknotes in my pocket, it's money but the government, with a snap of its fingers, has the power to make them worthless. So Indians will have to the bank, and explain where the money's coming from. And the more you have, the more questions there will be to answer. Is this a free world? I'm glad not to be in India!

the government has given ample chance to declare your assets basically asking the black holders to covert it into white money by paying a tax of 45 percent and the government claims that 1.45 lakh crore rupees has being claimed till now and if someone still keeps the currency they are worthless by now ,it is a strategic move to counter corrupted money which is held by corrupted

[leopard2]

it is happening all over the world, they just call it different names. Government filth stealing peoples property.  

so now it is happening in India. Sort of like a demurrage isnt it? 45% to 100% demurrage....fiat currency has an internal value of zero, so it is the worst means of storing value. Like the M. Jackson song, it doesn't matter if its black or white. 

Cyprus demurrage was 47%

German Mark - EURO currency reform was a 49% """demurrage""" LOL

At it gets worse. It will be much more painful here in Europe, where people do not traditionally hold lots of gold, like Indians do. My, oh my, when fiat money is "removed from circulation due to black money/terrorism/evil aliens" or whatever, there is bound to be much crying.

I still cannot comprehend why BTC is 700, instead of 7000, when I read things like this

[Avirunes]

Hello There,

India bans top currency notes such as Rs.500/- and Rs.1,000/- to prevent black money. Now there are only three notes in circulation Rs.10, Rs.20 and Rs.50

http://www.thehindu.com/news/national/live-narendra-modis-address-to-nation/article9320548.ece

Google for more news links.

Yes, There are some preventive measures taken to deal with the situation but still it is one of the masterstroke by India prime minister Narendra Modi against black money.

How do you see this action and what kind of impact this will create on the bitcoin in India?

Best
Dudeperfect

Please explain me how it is related with bitcoin discussion? I don't see any relation with bitcoin here. Please move thread to a suitable section.

This more likely belongs to Local(India) section.

i am curious that why India would ban the 1000 notes, that's not even value $20 per. in that case when your spend your stuff in India, you pay bunch of rupee banknote.

India was facing a problem of fake currency notes being supplied from neighbour countries which was a worrying issue. This step was not only taken to overcome this but also that somehow it was supsected that was used to finance terrorist organizations and to make the black money worthless that were being holded by corrupt officials also.

Most of these notes were of denomination 500 & 1000 Rs notes. So within midnight on 8th October, Modi announced it and made it totally worthless.

This will just place a temporary effect IMO.

Also in India, products /stuff can be easily purchased as they are cheap but not much and also people don't like to carry too much of cash in hand as there is a fear of theft. There are some people who carry cash in hand as they fear it paying it via electronic mode.