As was expected, Swiss Banks who lead the world in laundering unaccounted money have moved fast to ensure that its black money balances which includes balances worth US$ 1.4 trillion of Indians are not drawn out of the country. It is reported that they are advising their clients to convert their holdings into Bitcoins.
May be the Swiss authorities have seriously considered the possibility of Mr Narendra Modi coming to power and implementing his promise of bringing back black money of Indians back to the country.
While the news about Swiss Banks promoting Bitcoins may be good for the Bitcoin industry since the present market capital of bitcoins is about US$ 12 billion and even a fraction of the Indian’s Swiss Bank deposits converted to bitcoins would give a large boost to the exchange value of the bitcoins.
However in the long run this development may not be good for Bitcoins in India. Once the conversions gain pace, Bitcoins will permanently be branded in India as the currency of the tax evaders and the possibility of the Bitcoins being officially recognized would recede further.
I urge RBI to therefore move quickly and declare its policy on crypto coins and also develop suitable strategies to ensure that the efforts of those who want the Black money to be brought back to India for development purposes is not thwarted.
In case Mr Modi and his team are alert to these developments, it is time that they also develop their “Cyber Policy” which includes the “Crypto Currency Policy” and make it part of their manifesto.