India ranks among the top countries that lends talent to support the technological breakthroughs around the world.
33% of NASA scientists are Indians.
Almost 3/4th of H1B visas go to the Indians.
Indians are the richest ethnic groups in the US.
What would have happened if we banned the internet?
Do you think Indians would have accomplished all these great milestones?
Any sane person would say ‘no’.
Something as ridiculous as banning the internet is in the works in India with a proposal to prohibit the cryptocurrencies.
While the government might say that they are encouraging blockchain technology but discouraging the cryptocurrencies, it will have a broad impact on the entire space.
You cannot exploit the full capabilities of blockchain technology without the cryptocurrencies. For instance, a simple supply chain blockchain network will need a reward system to make it more efficient.
Variants of blockchain technology have always been in existence, what makes the current version of blockchain technology so great is the underlying cryptocurrency reward system.
Most amount of illegal activity in India (and elsewhere) takes place in cash transactions. That is why India’s demonetization accomplished so little.
Bitcoin and many cryptocurrencies (except truly privacy based cryptocurrencies) are not really anonymous. The transactions lay bare for anyone to access for the eternity of time.
In fact, the probability of tracing and tracking transactions over cryptocurrencies is far better than those that happen in cash or physical gold transactions.
The argument of illegal activities is a baseless one.
Cryptocurrencies could open flurry of investments into Indian startups
Having a legal framework encouraging the more legitimate cryptocurrencies will have another advantage: flourishing of startups.
Can you imagine how many people would participate in the development of startups from bright Indian minds if they could contribute from anywhere in the world?
Have a dollar threshold, let’s say $1000, for anyone to invest into an Indian startup idea. This itself could take the Indian startup space to the stratosphere.
Government doesn’t have to then dish out 100s of millions of dollars into building the startup ecosystem.
Current fiat system will not let people living outside the US to easily take part in the development of Indian startup ecosystem.
Benefits outweigh the risks
In our view, an ideal crypto regulation should ‘prohibit’ the privacy based cryptocurrencies while encouraging the public and decentralized cryptocurrencies like Bitcoin, Ethereum and many others.
In enumerating the benefits of cryptocurrencies as it relates to India, we can argue that:
- Cryptocurrencies are worse choice for nefarious activities; anyone using cryptos for illegal activities is only doing so in ignorance
- Indian startup ecosystem could be a big beneficiary if cryptocurrency is legitimized
- With a dollar threshold for investment (to avoid hostile takeovers), India could open a direct investment flurry from commons folk around the world into Indian economy benefiting everyone
Dire consequences of outright prohibition
- India will deny the youth from being part of the Web 3.0 on which the future tech will be built
- India could lose its edge in producing the great talent that could cater to the future of internet
- India’s internal systems could become so antiquated that they may not be compatible with the rest of the world in 10-20 years
Need for a sensible framework
Start with a ‘do no harm’ framework.
Bring the more notorious projects, like privacy coins, that make governments’ jobs difficult into the prohibition fold.
Hire the best of industry to be on the committee in building more progressive and sensible regulations that help blockchain thrive in India.
Drive the framework that will make India the cornerstone of the world’s Web 3.0 revolution.
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