What is Progressive regulation of Bitcoin?… It is time to kill Bitcoin

The Karnataka Bitcoin scam has done a great service to highlight to the Government of India the dangers of procrastination on an issue like “Crypto Currencies”.

It has taught a lesson to the Government which was procrastinating on the decision on regulation or banning of  Bitcoin and emboldened the Bitcoin community to grow.

There is no doubt that the lobby that supports corruption in India is behind the enormous support that Bitcoin gets for its continuation under some excuse or other.

Corruption in India and Black money associated with it is so strong that even the most popular and powerful leader like Mr Modi stands defeated in front of Bitcoin.

It was not necessary for waiting for Mr Sachin Maamani to alert Mr Modi about Bitcoin. Naavi has repeatedly alerted and chided the Government and all the key decision makers including Mr Modi, Mr Shah, Mrs Nirmala Seetharaman, the late Arun Jaitely. But Bitcoin continued to grow from strength to strength and even companies who had migrated to Singapore during the brief period when RBI was firm in its decision to ban Bitcoin returned back with greater enthusiasm as they seemed to have the patronage of even the highest court of the land.

If now one Mr Sriki is teaching the Government a lesson that

“If you associate with the evil called Bitcoin, you will only reach hell”.

Naavi has already predicted that when Bitcoin scam gets busted, people will blame Mr Modi and this will have its adverse impact on his electoral chances.

However there is a small opportunity now before the Government in the form of the Crypto Currency Bill. It should be used to ban Crypto currencies in India once for all.

The bitcoin lobby wants the Government to recognize Bitcoin as a legit “Crypto Asset” which can be bought or sold at market prices like a commodity. It holds out the carrot of tax income on trade transactions.

The Government should not fall prey to the traps that the Bitcoin lobby will lay before them and in the name of “Progressive” legislation and supporting “Block chain” as an innovative technology, give any room for legitimizing Bitcoin transactions. By holding the carrot of tax on transactions, Bitcoin lobby wants us to forget that it wants the captital to be out of tax net.

The claim that there is KYC etc is a bogey. People can easily open anonymous wallet accounts and use foreign exchanges for buying and selling crypto currencies and the KYC promised by the Indian Bitcoin exchanges are not reliable.

The market capitalization of Bitcoin today is $1,240,001,020,865 ($ 124000 crores  or Rs 84,00,000 crores) The total market capitalization of all crypto currencies is more than 2 trillion dollars (200,000 crore dollars or Rs 140,00,000 crores). On the other hand the total money supply in India is of the order of 19,00,000 crores.

If Bitcoin is legitimized, then theoretically the money supply in India can grow from 19 lakh crores INR to 160 crore INR because every crypto currency becomes fungible with INR supply.  What this will do to the Inflationary situation is for the Government to consider.

If due to the recognition, all Bank depositors in India start converting their bank deposits and stocks to Bitcoins, then they will be able to conduct havala transactions and be proud members of the dark web economy. Drugs and illegal arms can be ordered through Amazon and criminals, terrorists and anti nationals will be all proud of the Government and perhaps even vote for BJP.

However the economy will wither, tax payers will look like fools and they will also blame Mr Modi for cheating them on the promise of eradicating black money and corruption.

This could be the beginning of the end of Mr Modi…unless, he  musters courage to take the bold but most essential decision to “Completely Ban” Bitcoins and all private crypto currencies forthwith and criminalize its transactions.

While many will raise the bogey that many foreign Governments have recognized Bitcoins and it will be a regressive step to ban Bitcoins, it is an opportunity for Mr Modi to take the global leadership in eliminating Digital Black Money called Crypto currencies.

I am sure some of the  foreign Governments as well as the Tech leaders from FaceBook, Twitter and even industrialists like the Tesla founder will try to persuade Mr Modi and celebrities from Bollywood would use their charm to ensure that Bitcoins are protected and even the Supreme Court will again be approached to defend the rights of Bitcoin industry,

If Mr Modi is independent and is a true leader, he should take the decision to Kill Bitcoin. The demonetization demon must be still haunting Mr Modi making him drag his feet before taking this digital demonetization decision… but I am waiting to hear the news of …the death of Crypto currencies in India.

(PS: This is my personal view and I am aware is not the popular view even amongst my friends. But despite the possibility of being ridiculed and disliked for this view, in the interest of the country I have to say what my heart and mind wants to say.)

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About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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