Ali Hasan
India and Cryptocurrency is a combination that doesn’t work well as the Indian government is not ready to accept Bitcoin and other cryptocurrencies as a part of our economy and doesn’t want the people to have the ability to have monetary transactions via crypto.
Whatever might be the reason for the government to either ban it or regulate it; their actions have a negative effect on the Indian retail investors who want to invest in Bitcoin and various other cryptocurrencies as they are stranded in the middle of nowhere. They look at a future where they don’t even know whether the government will ban it or not.
The way government is behaving is quite confusing and lethargic. The delay of an official word from the government has left many in an uncertain state where they are forced to hold their investment. But you might think, what’s the problem in holding your investment?
Well there are 2 problems with that which are as follows:-
- The 1st problem is that they are losing precious time to invest in bitcoin and other cryptocurrencies. This will impact them negatively as by the time they will get a chance to invest, the opportunity might be lost and crypto might be too expensive to make a good profit.
- The 2nd problem is that the government might completely ban it and this will impact not only the retail investors but also the institutional investors as well. Just recently, Tesla bought bitcoin worth $1.5 billion and now it’s gaining momentum.
If the government decides to ban bitcoin, all Indians will lose a lifetime opportunity to invest into it. They are many apps that facilitate the exchange of cryptocurrencies backed by major investors but they all will lose big time if it gets banned. Apps like Zebpay and CoinSwitch Kuber will be majorly affected along with their users and investors.
People want the government to regulate it by having a tax of 5%-18% but allow the transactions related to it. This will help the Indian economy as there will be tax collections which are highly needed in this post pandemic scenario.
We might never be able to invest in Bitcoin
But the government isn’t likely in the mood of allowing the trade and exchange of crypto as they don’t want the power to shift in the hands of the common people. This authoritarian attitude is helping no one except the government and is hurting the people in every way that you can imagine.
While major countries are enjoying the crypto boom, India is standing still while the crypto ship is leaving the dock. What can we do? I guess we can wait for the government is either regulate it, tax it or completely ban it. Whatever it might be, we are losing precious time and a glorious opportunity which might not be available in the next 20-30 years.
Many experts believe that the government won’t ban crypto but as of now, my fingers are crossed and we can’t say anything about the future. On the other hand, there are also talks that the government might launch its own cryptocurrency coin that will be issued by the Reserve Bank of India. This will help the government to regulate it and tax it as per their needs and requirements.
But will it be worth it? That’s a question which is hard to answer. A government launching its own crypto which is regulated and controlled by them defeats the purpose of having a cryptocurrency like bitcoin. When the financial crisis happened in 2008, an unknown man named Satoshi Nakamoto created Bitcoin which was built on Blockchain Technology.
The whole purpose of creating Bitcoin was to have complete control and autonomy of how we store our savings. The problem with traditional money is that it could be printed out of thin air by the government anytime they want to. More than 30% of the US dollar was printed in 2020 alone to make room for the stimulus checks which were passed by the congress in the US.
The more a currency is printed, the more it loses its value and this causes inflation which slowly eats up your money. Hence, if there’s a cryptocurrency that is still controlled and regulated by the government, then it doesn’t matter whether we store our savings in traditional currencies or crypto. We will lose our money in the long term along with the control and autonomy that was envisioned by the creator of Bitcoin.
Bitcoin is being hailed as Gold 2.0 or Digital Gold but by not embracing it, we are losing a chance to have a great store of value which can fight inflation as well as work as a great hedging financial instrument.
As far as the Indian retail investors are concerned, they are at the mercy of an authoritarian government who isn’t ready or prepared to embrace the crypto boom. They will suffer until and unless there’s an official word from the authorities. All we can do is to hope that one day the Indian government will allow transactions regarding Bitcoin and various other cryptocurrencies.
