India’s crypto ban and CBDC : What possibly lies ahead?


This might also be the first time so many young Indians watch the parliament session to see what happens :

First, regarding CBDC – @nsitharaman might explain what a CBDC does and will put across a framework/call for discussion on the merits and demerits of the @RBI launching its own CBDC. A decision/resolution is unlikely in this session of the parliament.
Now coming to ‘private’ cryptocurrencies… SCENARIO 1 – Govt. will ban all private cryptocurrencies like $BTC or $ETH to be used as tokens of exchange BUT will allow users to hold them as assets. Taxes on realized gains whenever the user sells. Why?
Because the government is not against the collection of more taxes (duh!) but is against competition for the INR. If people start using crypto as tokens of exchange, it can create havoc and instability. So you might be able to HODL but not pay in $BTC to buy something..
This is the most likely scenario as it’s a win-win for all. Crypto holders are happy, exchanges (who are valued at multiple billions) don’t need to shut down like last time, no competition for INR and the government gets to collect more taxes too.
SCENARIO 2 – Govt. will ban anybody inside the Indian territory to buy/sell/trade in cryptocurrencies. Those who have holdings might be given an exit window. Also indirectly means –
1. Crypto exchanges (who are now valued at multiple billions) would also need to shut shop, at least partially, like the last time. 2. Thousands of people lose their livelihood 3. Blockchain companies move to other crypto-friendly nations like Singapore. More brain drain.
Lot of boomers want this scenario to play out but it’s unlikely because the government is not that naΓ―ve. ‘Some people might lose money’ isn’t a strong enough reason for a drastic step. The repercussions would be ample and the anti-innovation sentiment would be multiplicative.
There might be other rules too, like how companies like @WazirXIndia @CoinDCX @CoinSwitchKuber or @zebpay should be advertising. Maybe tighter guidelines and more disclaimers. All in all….
I genuinely feel it’s a welcome step that the govt. is finally seeing the need to regulate the industry. Much of the fear-mongering by boomers exists out of ignorance and not out of genuine concern. India needs to look forward and not get stuck in the by-lanes of mediocrity.
This might also be the first time so many young Indians watch the parliament session to see what happens πŸ™‚

Sign Up for NextBigWhat Newsletter