One of the major wars that Mr Narendra Modi has been fighting is the war against corruption. The demonetization was one such effort which flushed out the enormous amount of fake currency that Pakistan had pumped in. However either due to the fact that the amount of fake currency in circulation was incredibly high or the Indian Banking system was so corrupt that black money was easily exchanged through compromised Bank staff particularly in the cooperative sector, the demonetization exercise was not considered a success it perhaps was. In a way it dented the enthusiasm of Mr Modi also in tackling the black money menace.
One of the reasons why the black money in India persisted was that though holding of black money in the form of Cash was curbed to some extent in the demonetization drive, the presence of “Crypto Currencies” like the “Bitcoin” made it easy for black wealth to shift from cash and Swiss Bank form to Bitcoins and other private crypto currencies. It can be surmised that this digital black money was used to sustain the farmers agitations from Canadian sources and other anti India NGO and political activities. Despite the clear writing on the wall that Bitcoins were being used to subvert the country, the Modi Government did not respond due to the fear of the consequences that followed the physical demonetization.
Naavi.org has been fighting a parallel war on Bitcoins through scores of articles urging the Government to ban Private Crypto Coins. The war has been waged since 2013. Initially when I addressed the Bitcoin forum in Bangalore in their first conference, I highlighted the legal status of Bitcoin as an electronic document and held its validity as an electronic document. But I was trying to convince the Indian Bitcoin community to agree for a regulation to prevent use of Bitcoin as an anonymous currency. But the Bitcoin foundation refused to make any changes in projecting Bitcoin as a “Currency” which was illegal per-se and its promotions went from strength to strength to spread the mis-information that “Absence of a bar on the use of Bitcoins” is a “Legal approval of the Bitcoin”. The exchange owners continued to advertise and attract gullible investors and also distributed free bitcoins to regulators and industry captains to ensure that any opposition was neutralized.
One of the most unfortunate developments in the history of Bitcoins in India is the way the Supreme Court gave a thrust to the Bitcoin exchanges by scrapping the RBI circular. The judgment would be considered as one of the most innovative judgements for the students of Jurisprudence on how a judgement can say….”RBI has the powers to ban trading of Bitcoins by its licensees but the circular in question is disproportionately harsh”. I urge all students of law to go through this unique judgement
Modi Government when Mr Ravishankar Prasad was the Minister of Law and IT was so paranoid about the Supreme Court’s views on its functioning that the Supreme Court judgement froze both the RBI and the Government regarding any regulation of Bitcoins. This was taken note of by the industry and slowly the companies which had closed their offices in India and moved to Singapore started returning to India. The recent IPL in Dubai was used for intense advertising and Bitcoins proliferated like wild fire.
We had in the meantime pleaded, requested and even teased and criticized the inaction on the part of the Government including Mrs Nirmala Sitharaman, Mr Amit Shah, Mr Narendra Modi. We had pointed out that if there is a major loss to investors, investors would only blame the Modi Government and not the fraudsters.
Logically it was pointed out that any form of regularization of Bitcoins would cause the legit economic system to collapse, inflation to raise and the Cyber Crimes to increase.
It must be admitted that finally, I had personally lost hope and concluded that the “Power of Corruption” was stronger than “Narendra Modi” and the Government has reconciled to accepting the presence of digital black money. Passing of the Bill banning Private Crypto Currencies would prove that I was wrong and I am happy to be proved wrong in this respect.
We must remember that banning Bitcoins and other crypto currencies will make cyber criminals to pass their crime proceeds through Banks which will help us track the crimes better. This should therefore reduce the Cyber Crime incidents of financial nature in due course.
We also need to recognize that “Banning” is also “Regulation” and is well within the rights of the Government. I am sure that the Bill after its passage will be challenged in the Supreme Court once again.
I sincerely hope the Supreme Court does not strike down the law and become the torchbearer of digital black money in India.
Finally, credit should be given to an accused in Karnataka namely “Sriki” who was arrested on a charge of drug trafficking with the use of Bitcoins, went on reeling the names of politicians of all parties and started stating that he had given a share to X, Y Z etc. They were not verifiable either as true or false. It was Sriki’s word against that of the politicians. The pressure ultimately reached the Chief Minister of Karnataka and could have cost BJP the Chief Minister. Even if an enquiry had been instituted and the CM resigned pending enquiry, it would have dented the image of BJP . This finally woke up Mr Modi to shed his Manmohan like procrastination and make progress on the listing of the Bill in the next session.
I am sure that the corruption syndicate will not give up their fight and will now change their goal post asking for a new “Standing Committee” or JPC so that the passing of the bill can be postponed further.
Will Mr Modi and his Government walk the talk… and get the bill passed?.
Let us keep our fingers crossed and pray that wisdom dawns on the Government and gives it enough courage to take the “Banning of Crypto Currencies Bill” to its logical end.
I will rejoice only when the war is won and the surrender agreement is signed.
But for those who are pointing out that Bitcoin has been recognized by many other countries, I would like to point out that if Mr Modi takes the lead, he will become a hero in convincing the entire global community to ban Crypto currencies which are a serious threat to the legit currencies of the sovereign countries. This will provide economic leadership status to India and has to be pursued vigorously.
(PS: My apologies to many of my friends who have already invested in Bitcoins)