Cryptic Fate of India
By: Kushagra Yadav
In the past few decades, Indian Politics has been revolutionized in rather complex phases, and this complexity is yet to increase and deviate from the conventional Left-Right Debate. With the emergence of libertarian and free market philosophers, anarchism has etched its name in history and is relevant primarily to movements for national and social liberation. Sentiments of Liberalisation, Privatisation and Globalisation became popular after the decline of the License Raj and the abolishment of the poorly established Quasi-Socialist economy. The Indian Economy was relatively more closed back then than now. By adopting a mixed economic system, we involved both Capitalist and Socialist policies and tried to please the bipolarity in world order during the Cold War. And it is safe to say that we adopted the worst policies from both sides. Although, if we come back to the current scenario we see a lot of goods popping out from imports, one such commodity being Crypto-currency.
Regulations and Recessions
Indian Financial Markets have a rich history and a very bright future, attracting almost 10 lakh transactions every day. The number of investors has been increasing and why won't it? Imagine yourself in a scenario where the Colonials left, new companies are emerging, the War is over and India has its own "un-exploitive" policies. What would you be doing? Investing! LPG is imposed, the market is good and a new National Stock Exchange has been established. What will you be doing? Investing!
The trades are strong; an Economist now runs the country and the economy is in full thrust. India basically has its own local Great Moderation going on! What would you be doing? Investing? No, because the US's Mortgage Prices’ economic bubble finally burst. The 2008 Mortgage Crisis hit the world's markets globally and it took 2 years to cure Wall Street with the use of constant income injections and quantitative easing.
What worse than this can happen, more robust regulations? Yes, and they did. The government’s introduction of acts like the Government Securities Regulations Act, 2006 and the implementation failure of the 20-point programme (discussed in the 10th Five-Year Plan) further jammed the markets. Indians now were also recognizing that statutes like the Competition Act 2002 and Forex Management Act 1999 were not keeping up with the pace of corporate growth. With all the regulations India imposed, it took her almost 5 years to stabilize the situation, until a fed-up population elected a new government which worsened the situation even more.
But somewhere in the middle of all of this, Satoshi Nakamoto devised the first blockchain database and in 2009, gave birth to Bitcoin, one of the most famous crypto-currencies which gained popularity among youth investors who were not willing to trust the market after the crash. This gave Bitcoin a boost and made it boom with time.
Bitcoin Comes to India
Surfing on the back of its wave of popularity, between 2012 and 2017 several cryptic exchanges such as Zebpay and WazirX started operating in India. Authorities and regulators began to take notice of this new technology, as the price of crypto-currencies started shooting up because of its increased popularity and worldwide adoption. In India too RBI saw this as an untrustworthy source and issued a cautionary guideline to stop sale and purchase in crypto-currency but the market had already taken pace for good and the cryptic wave was warmly welcomed in India by miners and traders.
With the Recent 2020 Twitter-Bitcoin Scam, where 130 verified accounts like those of Apple and the Pop sensation Beyonce were hacked to promote a Bitcoin scandal, the Currency made it to the headlines of many business dailies. Today, India has a huge number of traders in Bitcoin, Ether, Ripple and what not. Akshay Haldipur, a cryptic analyst and trader, has almost 77 Bitcoins. With 1 Bitcoin costs almost 7-9 lakh rupees, he is a Bitcoin crorepati!
India also saw the emergence of its own crypto currency by the name of Laxmi Coin along with rumours of Jio Coin which was all the result of a virtual trading solidarity. But the question is for how long can this sustain in India, where the authority wants to hunt it all down?
Rift between the Rightists
Capitalism has been coined as the rightist economic system, and in its extreme, it is much more harsh and exploitative than it sounds. But from the authorities' perspective, this problem can be solved by restrictions whereas, the free marketers feel that "a freer market will make freer people". Both these opinions can't be falsified but there can be a middle path. If the authorities understand the need for upliftment of unnecessary bans and regulations like the issue of KYC only for adults actually restricting underage marketers from investing or if they take part in more privatization initiatives like that of Air India, this difference can be contracted as India never held complete free market opinions.
But the government’s inveterate history of differing opinions has stayed put. The authorities are skeptical about the security of Bitcoin exchanges. Although Bitcoins and Ethereum are encrypted with block chains, the exchange platforms use your conventional JAVA and Python languages. A heist was just made last month in India of about 336 Bitcoins amounting to ₹23+ Crores! Worse than all, Bitcoin can be used in the dark web to buy drugs as well but does this amount to a reason to ban it? Think again, the Cryptos in the current time work for cashless and most secure transactions. The transferability is immensely quick. This can be a major advantage for travellers. Furthermore, Bitcoins have low to 0 transactional risks or fee thus, they are being called the ‘future of money.’ Crypto-currency is already functional in developed countries for individualistic transactions due to its anonymity and not jumping on the bandwagon will be an imbecile decision.
However, the Satraps chose the extremist path. Since the country has no interest in even considering Crypto as a currency, it was rumoured that a note got passed back in June for consultation with the cabinets which looked towards banning Crypto-currencies entirely. A citation was made that this government will kill the Crypto-currencies back in 2017 and I guess, they are being proved right. Back in 2018, RBI banned transactions of Crypto by RBI regulated bodies. Although this was lifted by a Supreme Court PIL back in March 2020, two new PILs in 2018 were filed in the Supreme Court for banning Bitcoin which indicated towards a more hateful reason than a harmful one. These still remain pending.
Personalities like Musk and Gates have understood the importance of Bitcoins and also about regulating them rather than restricting them completely. The conservatives, who have a trend of not adapting to change, will face the world changing and India will be left behind in its bureaucracy, yet again.