India plans to introduce law to ban Bitcoin, other private cryptocurrencies
techcrunch.com
techcrunch.com
1. Legitimate use would be allowed, which is a good thing.
2. Illicit use could be pursued by tax auditors, who are in many ways far more effective at achieving an outcome than are prosecutors.
A ban is just a tax anyway. A tax that you pay, in risk adjusted terms, by being forced to pay the costs of dealing out of sight of the tax authorities.
Is BTC->USD conversion taxable according to your suggestion? USD->BTC? I suppose one or both, that's fine.
Now, is a transaction on Binance? (That would be one crypto for another)?
Is a transaction on Bitmex? (That would be futures.... not actually cryptocurrencies?) How about the Bitcoin futures on CME? A crypto ETF?
It's likely possible to build a suggestion that will curb "crypto" trading, but the cat is completely out of the bag, so you have to figure out what you want to stop.
But what's the real rationale for banning it?
You don't go about regulating a random artist online for what they sell to a customer be it code or a couple of fighter jets getting it on.
India is one of the most corrupt places on Earth, it's a perfect vehicle for organized white collar criminals to avoid scrutiny and usurp the system itself.
Fragile systems without robust oversight and integrity will be washed away by those with leverage and bad intentions.
I don't feel as though after all this time the answer is not obvious.
Governments can try but you can’t beat Gresham’s Law. No one wants your debased paper money anymore.
2) Nobody is forcing you to hold large quantities of cash. In fact, very few people or institutions do. Most portfolios are 90% 'other stuff'. Cash is for liquidity, it's never really been as a store of value. As a currency it works well.
If they want to hedge against inflation they would be buying real estate, equities and commodities - not magical monopoly money.
“The future is already here – it's just not evenly distributed.”
The Economist, December 4, 2003 William Gibson
2. I’m holding as little cash as I can and trading it out for Bitcoin and Ethereum every chance I can get.
It is not really currency and it's the worst store of value imaginable.
Literally ever kind of other normal long term asset would be better: stocks, bonds, real estate, commodities.
" I’m holding as little cash as I can and trading it out for Bitcoin and Ethereum every chance I can get"
This is exceedingly unwise. You may get rich, you may lose your shirt, probably something in between, but you're putting hard earned money into monopoly money controlled by a very small number of people who are either jerks or criminals and care nothing for the system.
So for example, whilst nothing can be done about Indian miners / holders of Bitcoin continuing to trade Bitcoin for other currencies in other jurisdictions (and by extension, nothing can be done to stop them from continuing to exchanging bitcoin for services and products online), Indian citizens won't be able to buy bitcoin using local Indian exchanges, nor will they be able to sell bitcoin using local Indian exchanges, nor will they be able to buy or sell products and services in India using Bitcoin.
Indian currency exists outside India. Exchanging it for bitcoin is a digital transaction. On the internet.
So I still don't see the ban as even meaningful words.
I mean, mostly. Obviously, plenty of large banks still launder money even though it's illegal. The practical end goal of any legal ban is to make the banned activity occur less than it would otherwise even if can't be stopped completely.
Their was a time the Indian government actually sent their goons to break into meetups and physically accost Bitcoin traders in India who were meeting up in person. I used to have the video of it from an Indian Bitcoiner from BTF or Reddit in the early days saved on one of my old phones, it was incredibly pathetic to witness grown men with guns beating un-armed nerds with phones and laptops in what looked like an empty factory floor with sticks or something if I recall correctly, but you saw the same thing when banks were shutting down and people were lining up in droves during the 2008 financial crisis. (Can't find that exact one anymore from back then but it happened again in 2016 [0], and its always with sticks for some reason, it must be a cultural thing Westerners don't understand.)
People were literately being thrown out in the streets and grown men were weeping, begging as the guards pushed them out in the streets for access to funds in their bank accounts.
It was heartbreaking but also incredibly pathetic to see Humans accept such a servile role in Life.
Perhaps, rather than focusing on what amounts to very low crypto trade volume, even for a developing country, the Indian Government should figure out why their farmers are revolting in New Dheli. And why Apple contractors are having their factories vandalized due to violating supposed strict employer laws. Or why China can just have border skirmishes with little to consequences when they take causalities.
For all of India's rich History, Culture and its supposed highly educated populace, it's Society makes it seem like such a backwards country that is analogous to the most absurd despotic banana republics, and while I really hope that some of the manufacturing from China is sent to India, I really don't think having any hopes it reforms the country as a whole makes sense when it still has a caste system which warrants and normalizes so much of this exploitation.
Cryptocurrency, but specifically Bitcoin, is the real 'fuck you' to the corrupt fiat monetary system that currently mis-allocates, destroys capital for the benefit of a few entrenched powers. Of course India would want to stop that, but, as is the case with most censorship the Streisand effect takes over and you have an influx of newly interested people. Which ultimately comes back to the core 'fuck you' sentiment of Bitcoin.
You can't stop math or software, which is all Bitcoin really is, so you just can't 'ban' any of it. What you can do is deter people from using it out in the open and pay taxes on it, cool... but there will always be a way to access it, which is why this makes no sense and should be ignored entirely.
> Because, how will anyone prevent trading online...
No, this they can actually do effectively; most exchanges are bound by KYC/AML laws that require certain documentation to be approved, and links to traditional legacy systems like banks. You put a choke-point there, pun intended as this is what the US did to legal businesses in other forms with bank accounts, that deny Indian citizens and you force people to go back to buying/trading Bitcoin in person OR alternatively use decentralized platforms like BISQ [1], of which I'm a big fan but could use way more users. India is a big country, so this could be a boon for them which is why I'm plugging them.
Ultimately, no one can stop Bitcoin, you can only sort of temporarily slow it down in certain ways and that's the real rub for the Indian government. We've built a Network that you don't even need an internet connection to make a tx on and is fully operational right now.
The same cannot be said about the alts, they can be phased out entirely overnight with little to no recourse. This will be a good lesson in which thrive and which fail so I'm looking forward to it. I wonder if we see an Indian version of Gamestop with all of this.