People who have been paying close attention to the financial situation in India may have seen dark clouds forming overhead. Ever since the 500 and 1,000 Rupee banknotes were deemed illegal, consumers have been trying to get their hands on legitimate cash. Unfortunately, it looks like ATMs are being depleted a lot faster than anticipated. This causes a lot of chaos and unrest in the country.
India Is Struggling Financially For Now
Making two of the most commonly circulating bills illegal overnight was not the smartest decision by the Indian government. It is understandable they want to combat corruption and counterfeit money, but the news came as quite a shock. Consumers can still exchange the useless bills for new ones and take a financial haircut while doing so, but that is not helping matters much either.
All of this has caused many residents to withdraw cash from ATMs wherever they can. Unfortunately, the massive demand for fiat currency causes these machines to be depleted a lot faster than originally anticipated. In fact, almost half of the country’s ATMs have run out of money on Friday, and the other ones are struggling with minuscule remaining balances right now.
It goes without saying this ordeal causes a lot of friction in India, and consumers are not too happy about the way things are unfolding. When people have issues accessing their own funds, things go from bad to worse relatively quickly. With several hundreds of thousands of people waiting in line at ATMs to withdraw money, it looks like the situation will not improve anytime soon.
To put this news into perspective, the now illegal bills represent nearly 80% of all fiat currency in circulation in the entire country. This leaves millions of people without cash, and it is even possible the entire cash-drive ecosystem can grind to a halt. Consumers are then faced with the choice of getting a bank account or using mobile money. Not the outcome people are looking forward to so suddenly.
There is a silver lining in all of this mess as well, though. It is expected many Indians will look for alternative financial solutions moving forward, Gold demands have already seen an upward trend, although only in reasonable fashion so far. This is also somewhat good news for Bitcoin, assuming local cryptocurrency companies use this time wisely to educate people on how they can take full control of their money at all times.
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