A good news is flowing through the media about Bitcoins. It is that according to news reports, “A Government Committee has recommended that all Crypto Currency Exchanges” in India are set to be closed.
Cointelegraph.com says “ Ban All Crypto Dealers, India committee reportedly tells Government”.
Economic Times says : War on bitcoin?.. Govt Panel seeks crackdown on cryptocurrency dealers in India
Moneycontrol.com says: Govt panel recommends shutting down cryptocurrency dealers in India
It is clear that multiple news media have received the information though there has been no official announcement as such.
We are happy with the development but we donot want to count the chickens before the eggs hatch. There is still a need for an official announcement since there is continued lobbying by the vested interests in getting Crypto Currencies going in some form.
What the press report indicates is just the first step where it might be stated that under the SEBI Act, the dealing in the commodity called “Crypto Currency” has not been licensed as a “Commodity” and hence all forms of dealing is per-se illegal.
There was no other way this could have been treated.
What this notification achieves is that local trading against cash payment and even bank transfers will stop.
Some “Experts” seem to be stating that
“banning cryptocurrency dealers or exchanges would not work”
“Instead of closing cryptocurrency dealers, the government should take steps to curb buying and selling of bitcoins or cryptocurrencies in cash. This move can reduce illegalities in the country”
“…in case of closure of domestic cryptocurrency exchanges, buyers will start buying them from foreign exchanges”
….so says Hesham Rehman, CEO & Co-founder, Bitxoxo, a bitcoin exchange operating in India.
I am sorry Mr Hesham Rehman, nothing short of complete banning of Bitcoins and all Private Currencies would satisfy the needs of our country.
We have taken a vow to eliminate black money from India and Mr Modi has taken a great risk to his career by demonetizing currency last November 8. Bitcoin or any other form of Crypto currency is just another form of Black Money. They have to go.
Preventing conversion from cash will only address a small part of the issue. We donot want accountable Bank funds to be converted into unaccounted Bitcoin or Crypto currency form. This will only help criminals and terrorists to run a parallel economy and weaken our economic fabric.
I donot accept the contention that banning Crypto currency is difficult or will be ineffective since people may switch to foreign exchanges. Let them do. Dealing with any foreign exchange will directly attract FEMA and violations can attract higher penalty. Also, a number of Indians are wary of dealing with foreign exchanges and there will be a significant drop of Bitcoin patronage because the direction of the policy will be set with the current move.
We know that criminals will not abide by law and continue to deal in corruption or dealing in drugs or engaged in terrorism or Naxalism even though they are declared illegal. Similarly Bitcoin will continue to be used by some even after the ban. Let them face the law.
I therefore see no reason to show any mercy on Bitcoin or Crypto Currencies (other than a sovereign Government sponsored systems if any) and it must be banned fully.
I therefore urge the Government to go the full distance and announce the “Demonetization of Bitcoin and all other Private Crypto Currencies” with immediate effect.
Other measures that may be required are:
- Two days time may be given for any current holders to declare their Crypto Currency holdings and convert them to INR.
- Non declaration should result in impounding of the balance and possible punishment under the money laundering legislation.
- Conversion should be subject to taxes as may apply to buying and selling of commodities.
- Holding of Crypto currencies beyond this cooling period of 2 days should attract more penalty.
Let us continue our war on Bitcoins until the roots are plucked out…. (As per Chanakya’s theory)