Sweeping changes enacted by India’s prime Minister, Narendra Modi, have had the unintended effect of creating a surge of new Bitcoin users. In November, Modi withdrew the highest denominations, that of the 1000 and 500 Rs notes, from circulation as a means to combat money-laundering. The removal of 80% of the nation’s currency has led to a backlash against the decision.

Other Factors Impact Financial System

Other changes that have impacted India’s economy include the aftershocks from Brexit, the devaluation of the Chinese yuan, and the recent election of Donald Trump in the United States. Furthermore, India’s prime minister made stipulations that whoever held 500 and 1,000 rupee notes could turn them in for smaller bills before a certain cut-off date. Those with more than 4,500 rupees could only deposit them digitally, and those with over 250,000 rupees would be subject to investigation.

The move was made in secret, and there was no time for the country’s banks to prepare for the rush. All of India was suddenly thrown into disarray, as people stood in long lines to either exchange money or to be able to withdraw just enough to buy food. Experts, including Surjit Bhalla of New York’s Observatory Group, have said that the black money market in India comprised a great deal of India’s everyday transactions.

Unforeseen Aftereffects

The currency shortage has led to stranded supply trucks, as drivers do not have the means of filling their tanks with gas. Some companies have struggled to pay employees, and others have paid their workers in cancelled notes. Many smaller businesses have seen their sales plummet, and wealthier people have simply switched to using debit and credit cards. Though the move has seen its fair share of criticism, Modi has expressed that the action was necessary to impede the methods that provide funding for terrorist organizations.

Bribing officials and police is a large problem in India, and a great deal of payments for things like real estate occur under the table. Another issue is that the money exchanged this way cannot be taxed. According to some estimates, only 6% of illegal transfers occur with paper money, as the vast majority of illicit holdings are represented in houses, lands, and gold. In 2011, Citigroup approximated that Indians hold 15,000 tons of gold. This precious metal can then be sent abroad and brought back again, thus laundering the funds.

The Interest in Bitcoin

The response from Millenials has been to flood the nation’s Bitcoin platforms in order to seek out a possibly more stable form of currency. India’s three Bitcoin exchange companies, CoinSecure, Unocoin, and Zebpay, have been enjoying high rates of new users since India’s economic woes began. Most of the customers trying Bitcoin for the first time are between the ages of 18 and 35.

The shift also points to the underlying instability occurring in India in the gold and real estate markets, and Bitcoin is appealing to those seeking a more secure means of investing. The co-founder of Zebpay, Saurabh Agarwal, has said that his company’s revenue increased by 25% from October to November. Zebpay, a Bitcoin wallet, generally sees 20,000 new investors every month, but saw 50,000 in November. Total users number 250,000.

Last month, Bitcoin reached $788, a two-year high and is trading for slightly more in India. Unocoin, another Indian Bitcoin service, saw its daily trade sums double, and it added three times the usual number of people in November. Coinsecure also saw a 300% jump that same month and now services 90,000 clients. More merchants are accepting Bitcoin as India continues to face financial uncertainty.