One bitcoin is selling at 817,400.00 Indian Rupees (INR), worth $11,700, on Bitbns, one of the few crypto exchanges in India where bitcoin can still be bought and sold.
On global exchanges bitcoin is at about $11,200 at the time of writing, making this a considerable premium probably because it is now very difficult to buy bitcoin in India.
“All the international transactions are blocked by my goverment to crypto,” says an Indian cryptonian before continuing:
“The local exchanges are barred from dealing with Local Fiat currency. My banks have sent me letters warning me to not buy crypto. Two of my bank accounts were shut down and the balance cheque sent to my home.
P2P system on some local websites have completly shut down as there are no sellers in sight as most people have shifted crypto in paper wallets, hardware wallets or overseas exchanges.
Goverment is continuously asking people to offload crypto or face jail. The economic advisor even said that buying crypto is counterfeiting foreign currency.
A bill has prepared to be presented and sealed on 7th of July to buy, hold or mine crypto as a criminal offence with Non-Bailable offence and 10 years jail term plus fines.”
He is presumably referring to Haleem Khan, a former secretary at the Ministry of Finance, who recently said there is a provision already for a 10-year prison sentence for counterfeiting currencies when asked of his views on a draft bill to make crypto holding illegal.
“I don’t find anything wrong with this approach,” Khan said, with concerns rising that India is moving towards outright dictatorship.
Reuters reports Reddit and Telegram was recently blocked in India. “In recent months, websites such as the discussion board Reddit, messaging service Telegram and comedy site College Humor have been blocked for intermittent periods, often for days and only in some regions,” they say.
It appears accessing a PayPal account is difficult too, with reports Citibank India has blocked PayPal payments.
India has apparently implemented capital controls as INR’s value against the dollar and other currencies keeps falling.
Interestingly they think high interest rates would prevent such fall in value, standing currently at 5.75% while inflation in India is at 3% with growth declining to 5.8%.
The value of a fiat money however tends to depend more on the level of government debt and the likelihood of it being repaid in addition to just how much demand there is for your money.
Demand that usually comes from selling goods and services to others which means they have to sell their fiat money and buy yours.
Looking at those factors, India has a 2.5% account deficit as it is importing more than exporting, and its debt of $1.2 trillion is increasing and very quickly.
High interest rates, on the other hand, increase both the likelihood the government won’t pay back the debt as well as increase the “real” supply of money. Both of those lower the value of fiat money.
Thus the problem is the government is spending too much and is redistributing too much wealth from the poor tax payer to the interest demanding bankers.
Yet they blame bitcoin for it because it allows smart people to maintain their wealth rather than see it fall in value.
That’s unfortunate because as a sort of “cheap” tech hub, bitcoin could have actually sent a lot of money to India where investors could have gone to build all sorts of projects.
The nationalists in India perhaps are not aware, but bitcoin moves in both directions, out of of India as well as into India if for example someone wanted to pay with bitcoin for freelance work.
Considering reports of very stringent capital controls, bitcoin may in fact be a convenient way for smart Indians to move money in and out.
That might however put a cap on just how much more the Indian government can spend than it receives in taxes, while also keeping the bankers in check for naturally they always want a higher and higher interest rate.
If people can instead exit with bitcoin, then they have to actually lure them back in by managing better their fiat money.
The government however wants more and more power, thus more and more spending. While bankers want more and more money, thus higher and higher interest rates.
Meaning instead of serving the people, they may be thinking in India of oppressing them. Certainly where it comes to financial matters, but also more widely, with an Indian freelance writer stating:
“Five years on, we have more than a glimpse of the ‘New India’ Narendra Modi has spawned. It is a reflection of its progenitor: culturally arid, intellectually vacant, emotionally bruised, vain, bitter, boastful, permanently aggrieved and implacably malevolent; a make-believe land full of fudge and fakery, where bigotry against religious minorities is among the therapeutic options available to members of a self-pitying majority frustrated by the prime minister’s failure to upgrade their economic standard of living.”
It’s a scathing critique of a generally very impoverished nation that lacks much education and now lacks financial freedom.