We Must Encourage New Ideas Says India’s Finance Minister on Bitcoin – Trustnodes

We Must Encourage New Ideas Says India’s Finance Minister on Bitcoin

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Anurag Thakur, India's Minister of Finance and Corporate Affairs

Anurag Thakur (pictured), India’s Minister of State for Finance and Corporate Affairs, seems to suggest the Indian government is backtracking on a speculated ban of bitcoin.

Speaking at the Punjab Chapter of the Entreprenuers Organisation this Sunday, the minister said, and we transcribe in full:

“We welcome innovation and new technology. I look at prime minister Modi, he himself is a strong advocate of embracing technology in various aspects of governance.

These are two different issues we weighting. Blockchain is the new emerging technology. And cryptocurrency is a form of digital currency.

Many currencies, whether it is bitcoin and others, they’re all there. We understand there is immense interest in these emerging virtual currencies, but we also need to look at the national security and the security of India and individuals.

I firmly believe that we must always evaluate, explore and encourage new ideas with an open mind.

The government of India formed a group of Secretaries, and the inter-ministerial committee, and that is due a recommendation.

Now, a high level inter-ministerial committee which was constituted, has given their report. The cabinet secretary also held a meeting with a group of secretaries also.

The government will take a decision on the recommendation of this inter-ministerial committee, and legislate a proposal, if any, which would be introduced in the parliament following the due process.

All I can say at this stage, because there’s the new space, new area, and if we look at one of these currencies, in a couple of weeks time the rate is x, after a couple of weeks it becomes 10x. It doesn’t happen with the fiat currency.

So I think we have to be very careful, at this stage, for taking any kind of step. So that is why this inter-ministerial committee is helping with their report and the government will look into that, and if need be, we’ll come out with legislation as soon as possible.”

This is the third committee set up by India. Two previous committees came out with two completely opposed recommendations. For this third one, “secrecy shrouds” it says The Hindu.

“We don’t understand what is so secretive about this bill that is in the making,” the Internet and Mobile Association of India (IAMAI) said. “What makes it more strange is, not a single ecosystem player, industry representative or members of the public were consulted before its draft was prepared.”

There clearly are different views within this committee and within the government because otherwise none of this would have leaked and there wouldn’t be an ongoing debate and pushback in India where their lawmakers have been petitioned against an outright ban.

Such outright ban seems unlikely now they’ve confirmed any legislation will have to go through parliament as it seems difficult to conceive any elected parliament deciding to criminalize the holdings of some digital numbers and letters.

That would be comically futile and dangerous because it would say quite a lot to the young generation and it would give India a very different reputation in the western business world, especially tech.

Such parliamentarians would have to inform their people why they would put Elon Musk in prison if he was Indian since Elon Musk himself does hold about 0.2 bitcoin and Tesla holds $1.5 billion worth.

Criminalization of actual possession on practical grounds makes India a no go zone for any of the Silicon Valley grandees, the seeders of all these trillion dollar companies, because many of them have actual crypto or have invested in crypto companies.

The Indian upper middle class moreover would be left behind in the race to digitize finance which runs on the blockchain but with crypto as the incentive. Without that incentive, well there is no incentive to build any of it or improve it.

Therefore it appears quite unlikely Modi would dare bring a criminalizing act in front of parliament because he may well lose it despite his majority as too much is at stake, and if he doesn’t lose it then to many young people India has no parliament because they will never understand why Elon Musk should be locked up instead of getting on with his job of sending us to Mars where we may well choose to use a non-state issued currency, like bitcoin.

That all said, so far we’ve only heard rumors and hearing the Minister directly is refreshing because he sounds well balanced.

Going by the minister’s words alone, there is no act, it’s still an if. Of course the Indian government, like many before it, should evaluate and explore cryptos, but according to IAMAI they’re not doing a good job because they’re not talking to any industry participants.

This is a very new field and a specialized field, so a banker or economist or politician would have a very incomplete picture without the input of the techies and those that know this space inside out.

If there was such input, then the minister’s 10x comment would have received different responses. One of them could be that cryptos are not being used as daily currency, although they are at times used for international commerce, so their volatility is somewhat similar to the volatile valuation of a fast growing startup.

Another response could be that the Russian Ruble, the Venezuelan and Argentinian Peso or even the Brazilian Real and the Turkish Lira have at times been even more volatile.

Even gold has been quite volatile as Gordon Brown knows very well because he sold at the very bottom.

On national security, it isn’t very clear what the minister means but there are ways of minimizing criminal exploitation risks with America’s FinCen requiring registration as a money transmitter all the way back in 2013.

If instead he means that bitcoin is such a threat it would collapse the rupee, then why not ban the dollar or gold too.

Bitcoin is an emerging asset class that has many useful qualities in finance including keeping the Indian Central Bank in check or the Fed in addition to its neutral global nature making this the first digital apolitical money.

That should be encouraged because the digital revolution is still barely nascent in the grand scheme of things. The iPhone is barely ten years old.

Standing in front of this is impossible, first of all – as China has now all but admitted – and second of all it is foolish because although people understandably don’t know it or don’t appreciate it fully, we are talking about a marvel of science.

The Merkle trees and the whole system that keeps triple accounting digitally without any human intervention or involvement while preventing double spending and all manages to court complete trust in the veracity of this accounting, is a leap in finance.

Therefore we’d respectfully ask the elders of India to leave alone their young because they have many smart ones that are doing some great things with the aim of advancing their country so that it too can be part of the digital revolution and the upgrade of our capabilities made possible by the invention of digital code.

We’d even go further and ask them to encourage their young in this most fine endeavor as they’re building the world of tomorrow.

Finally, this is one of those spaces where not only there is no shame in u-turning, but you actually get extra points for it as everyone here initially started as a sceptic and there have been many high profile u-turns which only give you credit.

So hopefully soon enough we get to talk about the nicer parts of India if this government does end the uncertainty and backs the young over the fat bankers of the 18th century.

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