Bitcoin is currently trading at a roughly $800 premium in India, according to the market price available on the rupee-based exchange BitBns.com.

Extreme price premium can be attributed to the difficulty of buying crypto in the country. As of last year, all regulated Indian banks and financial institutions have been banned from transacting in, and offering services related to crypto.

“All the international transactions are blocked by my government to crypto, The local exchanges are barred from dealing with Local Fiat currency. My banks have sent me letters warning me to not buy crypto. Two of my bank accounts were shut down and the balance cheque sent to my home”

Says an Indian cryptonian, P2P system on some local websites have completely shut down as there are no sellers in sight as most people have shifted crypto in paper wallets, hardware wallets or overseas exchanges. government working group made up of Indian tax, consumer protection, and general economic ministries had recommended a complete ban on even transacting or owning cryptoassets, much less integrating them into the mainstream, legal economy.

India is even preparing to pass a law that completely bans all forms of cryptocurrency activity in the country. This new law will reportedly prohibit the trading, holding, and mining of cryptocurrency.

Anyone caught in contravention of the law would face a 10-year prison sentence without the possibility of parole. Such a move would even place India above China in terms of anti-crypto regulations.

The high premium may suggest a healthy demand in India for bitcoin and other cryptoassets, as Indians without international banking connections are forced to use the local currency to buy crypto. Data from crypto analytics website Coin.dance show that another popular crypto-fiat P2P platform, LocalBitcoins, has seen a sharp uptick in Indian trading volume since March-April.

One recent instance in particular shows just how far the Indian government seems to be going to control the Indian economy. In late 2016, the national government suddenly and without warning even to its own ministries, declared that all 500- and 1,000-rupee banknotes currently in circulation were null and void – in an action that is known in India as “Demonetization.” These notes represented more than half of the physical money then in circulation in the country.

While the stated aims of the action were to root out corruption and “black money” from the economy, Demonetization has often been panned as a disastrous failure that cost 1% of the country’s GDP, a loss of 1.5 million jobs, and hurt the poor most of all.

High interest rates, on the other hand, increase both the likelihood the government won’t pay back the debt as well as increase the “real” supply of money. Both of those lower the value of fiat money.

Bitcoin is now trading with a 30 percent premium in Iran’s OTC market, indicating large demand from local investors. Thus the problem is the government is spending too much and is redistributing too much wealth from the poor tax payer to the interest demanding bankers. Yet they blame bitcoin for it because it allows smart people to maintain their wealth rather than see it fall in value.

As a sort of “cheap” tech hub, bitcoin could have actually sent a lot of money to India where investors could have gone to build all sorts of projects. Considering reports of very stringent capital controls, bitcoin may in fact be a convenient way for smart Indians to move money in and out.