Beginning a new technological phase, India has furthered the possibility of a cashless society. Stemming from innovative technology such as bitcoin and blockchain.
Bitcoin is a form of digital currency in which encryption techniques are used to censor currency and verify the transfer of funds, operating dependently of a central bank. Bitcoin goes hand in hand with blockchain. Blockchain is a digital ledger in which transactions made through bitcoin are recorded publicly and chronologically.
Billions of dollars are being used to invest in this innovation, which could in turn let India skip two generations of financial technologies. India’s development can lead to a transformation in the world’s economy.
Starting a decade ago over half of India’s population did not have a form of identification. This being in part because most people in India are born in a rural village and never get a birth certificate. That being said, without a form of identification one cannot acquire a loan, get insurance, open a bank account, or prove who they are.
“I think it’s interesting what’s being done, but people will rely more on technology and then people will start buying more things online and that takes away jobs and person to person contact,” Newtown High School junior Luis Sanchez said.
India had to first lay out the groundworks for bitcoin and blockchain to be successful. This layout was Aadhar. Aadhar is a 12-digit identification number given to every resident in India, it was issued for India’s federal government. Its job is to collect the demographic and biometric data of each resident and to store it in a centralized database. Within 6 years Aadhar has had about 3 billion authentications.
The next obstacle for India was banking. Most people in India did not have a bank account. Their government opened 11 payment banks to persuade citizens to put their money away and eventually save. These banks just hold money, they do not lend money. The banks offer free insurance and social-welfare benefits. Since the introduction of these payment banks, 270 million accounts were opened and there has been $10 billion in deposits.
“You get safety, you don’t have to carry a lot of cash around, with cash you lose it and it’s gone. A drawback is privacy, that information gets distributed to the government and everything is recorded,” NHS economics teacher Randi Kiely said.
Pairing with this new banking system, India launched its Unified Payment Interface (UPI). It facilitates the transferring of money to different banks digitally. In order to use UPI one only has to download a free app, enter their bank PIN, and identification number and it costs close to none to transfer money. The transaction occurs instantly and can be national.
A concept unique to India is India Stack. This innovation simplifies documentation. It virtually serves as a safeguard of personal information. It encompasses UPI and includes DigitalLocker which is a platform that verifies documents and certificates. It contains a consent layer that allows data to be transported securely and freely.
These paperless solutions aid citizens by modernizing them with their economy and by promoting innovation to improve health care, financial inclusion and educational services. It completely shifts the transportation of information.
A cashless society has proved to benefit nation’s worldwide. “With this system people don’t have to go to the bank and carry money around, it becomes safer,” NHS FLEX teacher Lisa Sheridan said.
While India has reached great lengths in improving its economy, some remain doubtful if India, or any other country will become wholly cashless.
“I don’t think we’ll ever get rid of cash, I believe it’s going to remain a mix of money and technology,” Kiely said.
Through these developments India has been able to give most all citizens a form of identification and has given them an opportunity to become successful in their evolving economy. India is not only bolstering their economy, it is providing innovative ideas that could shift the world’s economy.
Image Courtesy of India the Nation