Cryptos & Blockchain Vs. Reserve Bank of India
Hi Friends !!!
Great Suspense !!!
ü What RBI will do with Indian Crypto Industry ?
ü What Govt. Of India will do with Indian Crypto Industry ?
ü Who will win – Indian Crypto Industry or RBI ?
“All these billion dollar questions”............
Look at the attitude or say behaviour of RBI towards Crypto currencies specially private crypto currencies. In the entire World only RBI has given a distinct name to crypto currencies - Private crypto currencies and Public crypto currencies, otherwise every one recognises it as crypto currencies operated under different blockchains and CBDC (Central Bank Digital Currencies).
RBI says crypto currencies which are not issued by or owned by Central Bank of India (RBI) are all private crypto currencies and such currencies should be banned from operations. This regulation is included in the Bill pending in the Indian Parliament for approval.
Now here, let’s discuss in brief about Blockchain technology and how it relates to crypto currencies.
Blockchain technology is the collection & organization of data base in blocks connected with each other forming a chain shape in the decentralized eco system where there is no space for any central command authority which can control the entire eco system.
Crypto currency is the fuel of every blockchain. Every blockchain has it’s own crypto currency which powers the blockchain. If we block the crypto currency, it means we are trying to block the power of the car say fuel but want to run the car also. Is it possible to do same ? The answer is “NO”. But RBI wants to do it. May be RBI has some magic stick to run the eco system of blockchain without the crypto currencies.
RBI says that it is coming with it’s own CBDC.
Blockchain can exist without crypto currency but vice versa is not true. But this is also true that blockchain can not function without crypto currency. Only existence of blockchain is not important but functioning of same is must. Government can run its’ own projects on blockchain powered by its’ own CBDC but what about other private players in India and abroad ?
Even RBI has no answer to this how blockchain based projects will function without the crypto currencies in such blockchains when we talk about the eco system without involving Governments.
Now, the question is why RBI is running behind the crypto currencies for censoring them through Govt. legislation?
1. There is misconception that a country’s treasury does not get anything in form of taxes from whatever business being carried out in the eco system of crypto currencies.
2. There are bad actors who misuse the crypto currency eco system and damage the country’s law & order and economic conditions.
Answer to 1st point is “REGULATION of Crypto Currencies” . RBI should assist Govt. in framing Regulations and frame a Law in such a way that Crypto currencies and blockchain eco system can be regulated & controlled to ensure contribution to the Govt. treasuries in form of taxes in different ways (Direct & Indirect taxes). I think RBI has a disbelief that crypto currencies can not be regulated, so let’s ban it. A huge marathon of brain storming is required to regulate such dynamic eco system. RBI should invite suggestions from the market leaders of this industry and arrange for round table meets to discuss measures to regulate the fastest growing industry of the current arena in this world. To name some of the leaders here like Nischal Shetty – Ceo of India’s largest crypto exchange WazirX owned by world’s largest exchange i.e. Binance, Zebpay, CoinDCX ceo, etc. Even RBI officers should work hard little more and study the laws in foreign countries. This is also true that this industry is in the growing stage and under development. There is not an even single country which can say that they have fully developed mechanism to regulate the industry.
Answer to 2nd point is again “REGULATION” . Let’s go in to the time of 1990s – 2000 when there was “FERA – Foreign Exchange Regulation Act” to regulate Foreign exchange. There used to be hard regulations and it was criminal offence under FERA to offend under foreign exchange transactions. Then over a period of time new regulations came in to existence like “FEMA – Foreign Exchange Management Act”, Money Laundring Act, etc. I think bad actors are everywhere in the world. To control such bad actors, Regulation & enactment of laws is the answer to the problem.
Let the eco system grow and frame Laws simultaneously. There should be a body who can keep a watch on the development of the eco system, should advise the RBI & Govt. on the growth pattern so that sound proof mechanism can be developed to regulate the crypto & blockchain industry.
Infact surprising trend was noticed in India when there was news of banning cryptos by RBI during few months back. More number of new entrants were there and for this you can refer to the news published in ET .
Banning the Cryptos is not the feasible solution.
Like complete lockdown for ever is not the solution to control Corona virus.
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