To Whomsoever It May concern
Right now, I am asking one question to Mr Modi on why he is ignoring the need to remove the Digital Black Money which is taking roots in India. I hope I will receive the answer if not from Mr Modi, from any of his deputies.
(I am leaving aside the many good things Mr Modi has done during the last one year and ignoring the difficulties that have arisen due to the COVID Crisis and the continued challenges posed by the anti national opposition.)
I am speaking of the “Crypto Currencies” lead by the “Bitcoin”, which is the digital black money that seems to have encroached upon us and mocking at all the honest tax payers who are contributing to the welfare of the economy while the corrupt are feeling victorious.
“Bitcoin” is an anonymous asset that poses itself as a currency to replace Indian Rupees. Once rupee is converted into Bitcoin, it can further be converted into many other crypto currencies all of which are anonymous. They can also be converted into some foreign currencies and convertible into any other foreign currency. It therefore facilitates havala transactions in a jiffy.
Bitcoins and other crypto currencies are held in wallets which are as easy to set up as an e-mail account. There is no need to go through any stringent KYC process and people can use an anonymous Proton mail account and an online pseudonymous mobile number for additional authentication if required.
Bitcoins can be loaded onto the wallets and withdrawn through an exchange. Exchanges may have different forms of conducting KYC. After the various controversies some Indian exchanges have introduced some system of KYC but it would not be difficult to open benami accounts in these exchanges and transfer the bitcoins to other benmi wallets outside India. Even if the first account is identifiable, subsequently the Bitcoin can be transferred to an anonymous wallet, re -bought at a loss and account closed booking a capital loss while the original asset is converted into a benami wallet. It is a very effective money laundering operation.
Currently the exchanges in India are doing Bitcoin transactions following the helpful decision they extracted from the Supreme Court on the RBI’s prohibitory circular. It is therefore now possible to use the exchanges to link to Indian Bank accounts and transfer rupee balances in Banks into Bitcoins and later change it to other crypto currencies and foreign exchange without any control from RBI. Neither RBI nor any other department of the Government have tried to re-issue the RBI circular or ask for a review of the decision of the Supreme Court. Hence exchanges are now free to do their business of converting Indian rupees of investors into Bitcoins.
Initially the benami bank deposits will get converted and later, even honest tax payers will also start converting their rupee deposits into crypto currencies. The stock market investments will also get eroded to some extent and all other benami assets including gold may get converted into the crypto currencies.
Once we allow the termite of Bitcoin to settle down, it will gradually eat away all the rupee assets in our Banks and create a crisis in our financial systems.
Since Bitcoin is the currency of choice for “Bribery”, the entire community which is corrupt and want corruption to continue will not raise their voice against Bitcoin. The Cyber Crimes will also proliferate since Bitcoins are the currency of choice for ransomwares and operations in the deep web. The terrorists will also be happy since they can pay the sleeping cell operators in India through Bitcoins and not take the trouble of printing fake currencies.
In summary, Bitcoin is a perfect black money and presently it is allowed to be used freely in India. One of the failures of your administration has been your inability to ban Bitcoins and Crypto Currencies.
I am sure that there are many excuses for not doing it and also shift the blame to RBI. None of the excuses however indicate that it is not possible to ban Crypto Currencies. Some experts are misguiding the Government that instead of “Banning” we should “Regulate”. It is easy to “ban” but tougher to “regulate”, though it is possible to achieve “Banning” through “Regulation”. But the Government is not keen on pushing through the draft bill which is already with the Ministry of Finance and under the cover of the Covid, Bitcoin is establishing itself.
Banning Crypto Currencies is like “Demonetizing the Virtual Currencies” and should have been done along with the demonetization of the high denomination currencies.
I wish the Government takes note of this failure and try to address this at least in the next session of the Parliament.