Balaji Srinivasan, former CTO of Coinbase, believes that India’s impending ban on cryptocurrencies is tantamount to banning the internet and could cost the country trillions of dollars in potential revenue.
In an interview with The CapTable, Srinivasan said that a total ban on bitcoin (BTC) and other cryptocurrencies would only divert trading revenue to neighbouring Asian markets, creating a trillion dollar revenue deficit for India :
It is imperative that the ban (India’s plan to ban possession, trading, mining or investment in cryptocurrencies) does not pass. It would be a trillion dollar mistake for India, no exaggeration.
On Thursday, an unnamed senior finance official told Bloomberg that an impending ban is highly likely, revealing that cryptocurrency holders have three to six months to convert their funds to legal tender.
The Crypto-currencies and Regulation of Official Digital Currency Bill was tabled in late January and also lays the foundation for an official digital currency to be issued and controlled by the Reserve Bank of India.
Angel investor and entrepreneur Srinivasan has suggested that India could be 20% poorer in the next five years than it would otherwise be if the ban is passed. Former general partner Andreessen Horowitz said banning cryptocurrencies would effectively prevent the financial internet from taking root in India :
India may have become 20% poorer within five years than it is today. It’s almost like banning the internet for 5 years. The losses add up many times over. …] In many ways, this would be a reversal of economic liberalization. This would amount to a ban on access to the financial internet in the country. And that wouldn’t even accomplish the goal.
Although the ban applies to all holders of cryptocurrencies, the impact on individuals may not be as great as that on traders and businesses. By using wallets for cold storage and keeping control of their private keys, Indian citizens on the ground can potentially circumvent any anti-crypto legislation, but of course face problems when trying to withdraw money.
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