This site has time and again called upon Mr Modi to stand upto his commitment for eliminating Black money by extending the action to the Digital Space by banning the Crypto currencies. We had urged Mr Modi to take up this “Ban Crypto Currency” campaign to the world scenario and take leadership in fighting against the Digital Black Money and currency of cyber criminals which the Cryptocurrencies like Bitcoin are. It is unfortunate that Mr Modi did not take the cue and procrastinated.
Now Mr Donald Trump appears to have taken up the lead on the Global scenario to express his opposition to Crypto Currencies. Mr Modi has therefore lost the opportunity to be the global leader in this fight against Crypto currency which is also a fight against terrorism, drug trade, illegal arms trade as well as Cyber Crimes.
I hope that Mr Modi will atleast be an early supporter of Mr Trump and take the second spot amongst global leaders to start the fight against Crypto currencies.
If these global leaders donot understand the damage that Crypto currencies can create to the global economy then they will be responsible for the growth of a “Economic monster” as big as the ISIS. The US Fed Chief Mr Powell has also endorsed a similar view asking FaceBook to stop the project.
The reason why Mr Trump has called out Bitcoins and Crypto Currencies is the threat that FaceBook has posed with its project “Libra”.
So far, some people neglected to raise their voice against Bitcoins because they felt that the threat is too small to be worried. Also the Bitcoin and the 1600 other Crypto Currencies were not capable of creating their own eco system for using the currencies and had to depend on the trading and exchange infrastructure of the physical world.
But FaceBook poses a threat of a different dimension. First of all it has the membership which is equivalent to the largest nation states in the world. So reaching out to all these members with information on Libra is too easy. Additionally Face Book (along with WhatsApp) has a usage eco-system consisting of not only its own Game platforms but also access to advertising budgets and through them the trading platforms of other online e commerce entities. Hence the users of Libra may have a huge usage basis within the Facebook domain itself.
As a result, if Face Book decides to make an issue of Libra as an ICO, there will be enough takers to enable Facebook to simply raise cash from no where. Once established, Face Book will be bigger than the Central banks of many countries issuing Libra whenever it wants and converting it to legacy currency in the back ground.
The impact of such a development is too grave to ignore even for the US economy.
At present FaceBook says that it will not launch Libra in India. This only means that the ICO may not be available through Indian Banks. But those who have money in International Banks will be able to buy and trade in Libra. Additionally Libra is likely to be freely convertible to other Crypto Currencies and hence holders of other crypto currencies will be able to convert them into Libra and vice versa. Since there are a few stupid countries which have provided conversion of Bitcoins into legit currencies, the entire global system of currencies will be corrupted with the Crypto currencies.
For example, the Cyber Criminal who extorts Bitcoins through a ransomware may be able to convert them into Swiss Francs and Japanese yens which may then be converted into INR through RBI making it possible to convert Bitcoin to INR in a two step process. This may increase the cost of conversion but may be still cheaper and convenient than other havala operations.
Though Mr Modi has lost the initiative, it may still be possible for him to get back into the ring and share the leadership with Mr Trump in eliminating the menace called “Crypto Currencies”.
I wish Mrs Nirmala Sitharaman and Ravi Shankar Prasad guide Mr Modi properly in this regard. The RBI has taken the right first step to ban the exchanges but is hesitant to take the next step because of lack of support from the Finance Ministry. The Supreme Court cannot be relied upon to take the bold step since they can be swayed more easily by the arguments of a Kapil Sibal or Manu Singhvi than what is good for the nation.
Let’s hope the current CJI is different and on July 23 when the Supreme Court takes up the petition of the Bitcoin industry, he and his brother judges show the courage to stand up for the good of the society and the ability to understand the economic and other threats of the Crypto currency.