You’d think they’d have learned by now: barely two years after going ten rounds with the Indian Supreme Court, steadfastly failing to look reality in the face, and battling hopelessly with the inevitable rise of cryptocurrencies on the Subcontinent, the Reserve Bank of India was back in the ring last week: still throwing wild haymakers at the future. Last Thursday the Bank published (yet) another policy paper in an attempt to land a blow on digital currencies, even though (like all the rest) it’s highly unlikely to hit the mark. So isn’t it time to throw in the towel? Isn’t it time to embrace the future, rather than hide under the covers and pretend it’s not there?
Apparently not: the boys (or, more likely, old men) in New Delhi are still spoiling for one last chance to get back to the past.
The most recent paper rightly, if a little incongruously bearing in mind its provenance, lavishes praise on the role decentralised ledger technologies (or Blockchain to you and me) can play in India’s future, but then goes on to deny any need for regulation of digital currencies (duh), before slipping off the mask altogether and calling for their outright ban. Apparently that’s because they’re concerned cryptocurrencies threaten the nation’s financial sovereignty…yeah, right. But let’s take it from the horse’s mouth (so to speak):
"Historically, private currencies have resulted in instability and therefore, have evolved into fiat currencies over centuries. The retrograde step back to private currencies cannot be taken simply because technology allows it without considering the dislocation it causes to society's legal, social and economic fabric."
Nonsense on Stilts
That, of course, is unadulterated tosh: when was the last time India had a “private currency”, and what could better disrupt and hobble the Subcontinent’s social and economic future than a complete denial of access to digital currencies: bearing in mind, in particular, that they’re already being tested and tried in most other major economies across the globe, including that arch regulator, the US Federal Reserve (www.federalreserve.gov). This is not a time for India to be left out in the cold. And the paper thin suggestion cryptocurrencies might actually threaten the future of the Rupee, as well as endanger domestic monetary policy (a claim made explicitly by the Reserve Bank), is not only risible, it’s what Jonathan Swift would rightly dismiss as “nonsense on stilts”.
Let’s Embrace the Future
So, just for a moment, let’s try to re-engage with social and economic reality ourselves: who knows, someone from the Reserve Bank might actually be reading this, so we should do our best to try.
The fact is, Blockchain and cryptocurrencies are already part of our future, and India can’t (and won’t) duck that fact, whatever the Reserve Bank might have to say otherwise: not least because the Supreme Court won’t let them (they’ve tried that one already). Which means there’s also no need to speculate over the Bank’s peculiar suggestion that anyone currently holding cryptocurrencies will be given “reasonable exits” following a ban, because it’s just not going to happen: there won’t be a ban…and the Bank knows it. Its paper is an object lesson in whistling in the wind. Something Prime Minister Modi’s Government knows more than most…and they won’t let it happen either.
And as if to prove the point, India’s Big Bull crypto platform (www.bighbull.com), launched only five months ago, has already delivered 2,000% growth in its first three months of operation: Indians, it seems, are voting with their wallets, whatever the Central Bank might think.
In short, it’s time for the Bank to throw in the towel…let’s move on and embrace the future instead.
Executive Overview
Bitcoin may have tarnished the reputation of cryptocurrencies before the sector is fully on its feet (largely thanks to the machinations of Elon Musk), but digital currencies are an integral part of our future, and it’s time for the Reserve Bank of India to wake up to reality.
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