Discounts offered to speed up India's digital transition
The withdrawal of India's 500 and 1,000 rupee notes took out 86% of the country’s cash at once, with one estimate suggesting a possible two percentage point hit to projected GDP. The government is discounting digital transactions, the highest being a 10% break for using digital currency, contributing to a boom in business for Indian digital payment companies, such as Paytm, and bitcoin.

India isn’t the first to push for a shift away from bank notes, of course, but what’s unique is that it’s happening by surprise government fiat. Some observers are skeptical that Modi will achieve his stated aim of cleaning up the country’s rampant “black economy,” where the wealthy are thought to hide their money and do business beyond the reach of the state. Since the declaration, India’s equivalent of the IRS has seized millions of dollars worth of cash in a series of raids. But the seizures don’t amount to much compared to the collapse of commerce that has occurred due to an ongoing shortage of cash.

Some early winners are emerging. Local digital payment companies are doing a booming business—particularly Paytm, the country’s most popular service, where people are signing up at 14 times the normal rate. Bitcoin has surged in value, too, which looks like a direct result of a spike in activity in India.

Modi’s government is now scrambling to print new denominations of cash that will replace the voided ones, a process that is expected to take months. It’s unlikely that a subsidy for digital transactions will dull the pain of such a huge shift on its own. But it may mean that once the dust settles, more of the millions of people now experiencing digital money for the first time will decide that it’s better than dealing with dirty paper.

(Read more: Bloomberg, The Economist, The New York Times, Quartz, “Me, My Money, and My Devices,” “A Closer Look at the Future of Money”)