A full-blown ban on cryptocurrencies in India is looking more likely by the day. Those proposing the ban will have draft legislature sealed by Indian politicians on July 7th. This does not mean that a Bitcoin India ban is imminent. However, there are several reasons why some believe a ban is likely.
- Facebook is considering withholding release of Libra in India, in response to cryptocurrency ban concerns.
- In 2016, India successfully demonetized all 500 and 1000-rupee notes (equivalent to $8 and $15), as part of a similar anti-money laundering initiative.
- It is reported that Indian officials are already recommending that Indians liquidate crypto assets in anticipation of a ban.
However, not all cryptocurrency projects are against India’s move to ban cryptocurrency.
Bitcoin SV on the Bitcoin India Ban – Get Regulated or Get Rekt
In a recent CoinGeek article, CoinGeek and Bitcoin SV writer Derek Tonin chastised CZ at Binance.
In response to CZ claiming than a Bitcoin India ban will increase demand for BTC, Tonin stated that:
CZ seems to get a thrill from running an exchange that offers potentially illegal activity, and it’s not strange to see him celebrating Indians potentially doing the same. Unfortunately, he doesn’t understand the long term repercussions of working against governments. If he had the wisdom to run a professional, law abiding business that valued real, useful assets, the crypto industry would be better off. – Source
What Tonin and Bitcoin SV seem to forget, though, is that working with governments can be counter to the basic democratic freedoms of cryptocurrency users.
In Hong Kong, we recently detailed how Bitcoin can be used to help support basic press freedoms. However, in a Bitcoin SV future where BSV panders to the whim of governments like the Chinese Communist Party, this wouldn’t be possible.
India’s Tiptoe Toward Totalitarianism
Is India becoming a fascist dictatorship? As alarming and conspiratorial as it might sound, the simple answer is, yes.
Forcing cryptocurrency holders to liquidate assets or face 10-years in jail, is not about preserving the sovereignty of the rupee. What India’s proposed Bitcoin ban really wants to do is simple. First and foremost, India plans to use cryptocurrency as a scapegoat for systematic economic mismanagement by India’s ruling Bharatiya Janata Party.
India’s Authoritarianism Crisis in a Nutshell
To understand the scope of the problem at hand in India, it is important to understand how the political climate in India has changed over the past 5-years.
India Might Soon Become a Hindu Theocracy
India’s ruling Bharatiya Janata Party is planning to change India’s constitution to make India a Hindu theocratic state. At present, India is secular and home to 200 million Muslims (14.2% of the population) and 28 million Christians (2.3% of India’s population).
India becoming a theocratic state will effectively strip a greater number of people than the combined populations of the UK, France, and Germany, of their basic democratic freedoms.
Saffron Terror and Hindu Oppression of Minority Groups
Rising Hindu nationalist sentiment in India is already seeing increases in mob attacks on minority groups. The U.S. State Department raised concerns regarding this matter as recently as June 24th, 2019.
The State Department report, released on Friday, said some senior officials from Prime Minister Narendra Modi’s ruling Hindu nationalist Bharatiya Janata Party (BJP) last year had made “inflammatory speeches” against religious minorities. – Source
It is an observable fact that mob attacks on Muslims and critics of Narendra Modi are becoming commonplace in India. Attacks aren’t a new phenomena, though.
So-called ‘Saffron Terror’ in India has been on the rise since the early 2000s. During this time extremist Hindu terror groups have attempted to stir tensions by executing attacks and lynchings designed to look Pakistani Muslim in origin.
Sadly, BJP politicians refuse to acknowledge Hindu attacks on minorities as politically or religiously motivated. Moreover, refuting attack concerns is easy thanks to the way India currently collects, collates, and publishes data, which does not support India’s official political narrative.
India Uses Big Data Fraud to Suppress Political Criticism
When Narendra Modi came to power in 2014, he pledged to finally address the problem of out of control farmer suicides in rural India.
Thousands of India’s farmers are burdened by impossible to service debt. This is usually due to farmers having agreed to buy seeds exclusively from American owned seed producers. As debt burdens become insufferable, farmers commit suicide.
In the first 6-months of 2018, 1,307 farmers in the Indian province of Maharashtra, committed suicide. However, instead of addressing India’s ongoing farmer suicide problem, India now simply omits to publish annual farmer suicide statistics.
India Freedom of Information Requests
As well as omitting to publish unpopular national statistics, India’s ruling Bharatiya Janata Party has attempted to curtail Indian citizen Right to Information (RTI) requests. This move came after a number of citizens used RTI requests to inquire about the actual (as opposed to stated) academic qualifications of Indian PM Narendra Modi.
India Censors Lynching Statistics
As already mentioned, India has refuted U.S. claims that minority groups are being oppressed in India.
“Mob attacks by violent extremist Hindu groups against minority communities, especially Muslims, continued throughout the year amid rumours that victims had traded or killed cows for beef,” – Source
India can refute claims thanks to the fact that authorities no longer count the number lynching attacks which take place in India each year. India, therefore, denies lynching is a problem. Politicians also do so despite India’s own Supreme Court urging politicians to consider enacting new laws to combat mob attacks.
India GDP Data Manipulation
When Indian PM Narendra Modi came to power, he did so riding on promises to grow the Indian economy. However, evidence suggests that policies like demonetization of 500 and 1000-rupee notes have had the opposite effect.
To counter negative PR, India’s ruling Bharatiya Janata Party has changed how India’s GDP is calculated. As a result, India no longer collects unemployment statistics. More confusingly, India has made changes to base periods which India uses to calculate GDP.
India’s Ruling BJP Party Changes Congressional Laws to Escape Prosecution
Until 2018, it was illegal in India for political parties to accept foreign funding. However, in 2014, India’s new to power Bharatiya Janata Party was found guilty of subverting foreign funding restrictions. The BJP has, therefore, since retrospectively amended congressional rules to escape prosecution.
New laws enacted by the BJP, exempt Indian political parties from having to account for any funding received from overseas at any point after 1976.
A Bitcoin India Ban Will Mirror India’s 2016 Demonetization Scandal
At present, those proposing banning Bitcoin say doing so is necessary to tackle fraud. However, the BJP exempting itself from financial scrutiny means that this stance is somewhat hypocritical. More importantly, previous attempts to combat money laundering and tax avoidance have failed spectacularly.
In November 2016, India’s Bharatiya Janata Party gave Indians just 4-hours notice that all 500 and 1000-rupee notes, would be demonetized.
- Demonetization resulted in a 1.5% contraction of the Indian economy.
- Small business profits slumped by 115%.
- Over 100 Indians died attempting to exchange demonetized notes at banks.
- 150 million Indians did not receive a wage for several weeks.
- Thousands of SMEs shut down, making hundreds of thousands of Indians unemployed in the process.
After demonetization, the Reserve Bank of India revealed that 99.3% of all demonetized notes had been returned to bank branches. It is, therefore, evident that demonetized notes were not used to fund terrorism or facilitate money laundering as originally claimed.
India’s Bitcoin Ban is an Assault on Financial Freedom
When people like CoinGeek contributor Derek Tonin argue that Bitcoin needs to work with governments, they expose BSV as antithetical to all Bitcoin stands for.
Proposed Indian bans on cryptocurency are little more than state-sponsored financial tyranny. Proposed bans also represent little more than an attempt to use Bitcoin and everyday Indians, as scapegoats for government economic mismanagement.
India’s Looming Banking Crisis
At present, millions of Indians lack confidence in India’s ruling Bharatiya Janata Party to manage the economy. Systematic unwise lending by Indian banks currently sees balance sheets plagued by 9.3% Non-Performing-Asset (NPA) ratios. (Approximately one in ten Indian bank loans is never repaid.)
High NPA ratios are a direct consequence of government corruption.
- 69% of all India’s loans are issued each year by government-controlled banks.
- Crony capitalism sees top positions in most banks appointed by a small group of Indian politicians and bureaucrats.
Crony capitalism control means that regular Indians and small businesses consistently struggle with loan approvals. However, anyone with connections to India’s politician-bureaucrat mafia has no such problem.
Many years ago, while I was sitting with the chairman of a Public Sector Undertaking (PSU) bank, a phone call was put through to him. The chairman immediately started talking in Telugu, not realizing that I understand it because it is my native language.
The person at the other end of the call was a minister who was asking the bank to approve a loan to a company whose promoter had doubtful credentials. He also had a terrible record of repayments. All that I could hear from the chairman translated into “it will be done.” – Source
Corruption in India is Why India Needs Bitcoin – Absolutely Not BSV
By being free from state control, Bitcoin currently provides a way for everyday Indians to decouple from India’s corrupt financial system.
Using Bitcoin and other decentralized cryptocurrencies, Indians can safeguard their wealth from repercussions of top-down economic mismanagement. More importantly, by being politically neutral, Bitcoin helps preserve basic human freedoms.
This is why India hates Bitcoin. This is also why China hates Bitcoin.
By comparison, Bitcoin SV seems to believe that allowing authoritarian governments to wield regulatory control over Bitcoin will be a good thing. The only question is, which is, therefore, more credible as cryptocurrency? Bitcoin which is censorship resistant and politically neutral? Or Bitcoin SV which wants to get into bed with any dictator who pays for the privilege?
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