Is India Getting Ready for 40 Years of Reverse Gear by Banning Cryptocurrency?

Cryptocurrency industry, despite in its nascent stage, is roaring like a lion around the world. The blockchain revolution has allured so many countries around which include the world-leading powers as well as the developing ones. Every now and then, newer innovations are taking place in the industry. Despite the boom and almost international embracing of the new age digital currency, India is still wary of it. The country is not very open about the cryptocurrency and is rather at the verge of banning it altogether.

Is India’s Crypto Ban brimming with sanity or insanity?

A few weeks ago, Varun Sethi, a blockchain advocate, unveiled the presence of a draft on ‘Banning of Cryptocurrency & Regulation of Official Digital Currency Bill 2019.’ Soon, the report was published by the govt. The Former secretary at the Department of Economic Affairs, Ministry of Finance, who now leads the Inter-Ministerial Committee (IMC)- Subhash Chandra Garg released the report. The report is in no favor of the new age blockchain-based digital currency.

Ban! Ban! Ban!

The report is not only waving crypto a goodbye, but the report also proposed a jail term for those who will interact with the crypto sphere in the following ways-

• Anyone who will be found mining cryptocurrency or any related tokens.
• Anybody who will be found holding the digital currency.
• Anybody who will be found doing any kind of transactions in any manner, i.e. any direct or indirect way, through any crypto exchange or through the means of crypto trading methods.

Crypto Ban words are loaded pistols-

The Crypto Ban has made it very clear that the consequences will be very serious if anybody will be found involving themselves with crypto-related activities. The report motioned the following consequences as an example-

• The jail term ranges from a time frame of 1 year to 10 long years.
• Not only this, there are provisions of the penalty of 50 Cr. INR (which is almost equal to 7,255,000 USD.)

Shooting oneself in the foot?

Timothy Draper, United States-based venture capitalist, founding partner of Draper Fisher Jurvetson (DFJ), Draper Associates, and the founder of Draper Venture Network and Draper University, sees this situation with concern. He thinks that India’s resistance to cryptocurrency will affect the country’s growth. He pointed out that although Modi government is fetching great results in the past few years, still the country has not managed to get rid of corruption fully. On the second time selection of PM Narendra Modi, the crypto stakeholders of the country got all optimistic about the crypto future of India.

Nothing by far has been a clear green signal when it comes to cryptocurrency trading in the country. For instance, the Dinesh  Sharma Committee from 2017 point at the complete ban on the digital currency, and suggested that warnings should be issued too in this regard to state that cryptocurrency is neither-

• Any kind of coin, nor
• It is any currencies.

Another draft was created by another committee in the same year, which revolved around the Regulatory Framework on cryptocurrency. This report, too, did not speak in favor of cryptocurrency. Again there was no recognition of the crypto as either any coin or currency.

Draper’s Take-

It is akin to the Luddites. They are in fact saying, ‘we will not tolerate progress.’ It will set them back 40 years. Imagine if they did this with the internet? […] It seems as though they are clinging to their power instead of thinking of the good of the country. This move shows that Modi has not yet rooted out corruption in the country. It lives on in his own government. […] People will want to leave India to get to a country that is less backward. I suspect they will get out so they can live a better life.

Draper’s comments are thought-provoking and are very critical of the Crypto Ban. Changpeng Zhao of Bianance also supported Draper’s view on the crypto ban on Twitter yesterday.

It will still be a wait and watch the game to see whether the Indian government pays heed to it. India is developing at a point of time when other countries have already gone a few steps ahead into the crypto revolution.  For instance, Russian deputy finance minister Alexei Moiseev told that his country is currently looking at the bill on digital financial assets, and soon, the adoption will be considered in the second reading. Whereas, the Initial Coin Offering has already got a green signal in the country.

Butchering the golden egg goose?

Overall, the crypto world is going from strength to strength this year. Recently, Mike Novogratz, the CEO of Galaxy Digital, pointed at how the world’s largest crypto coin grew from 4K USD to 13.5K USD.  He is confident that BTC will soon stabilize between the 10K TO 14K USD. Further, he also said that there are chances for BTC to reach 20,000 USD mark within this very year if the crypto world will get active institutional investments.

India may close its eyes on this growth of the crypto industry, but the truth about the phenomenal growth of the crypto industry can’t be dismissed either.