Posted 8 months ago | by Ben Armstrong
Indian Government May Have Cryptos in its Sights – Again
According to a recent report published in Moneycontrol, the Indian government is considering a ban on crypto trading.
Unlike the earlier ban that was put in place by the Reserve Bank of India (RBI), the new ban would be an act by the Indian Parliament, and would prevent Indians from trading cryptos, and also eliminate the Indian crypto exchange business.
The anonymous Indian official said,
“Once Parliament resumes for the session, we are hoping to get (the law) ratified.”
India has been harsh on the crypto industry, and it is difficult to understand why a nation with such a large unbanked population would be so adverse to a technology that could help pull people out of poverty.
India Has a Terrible Record in Creating Sane Monetary Policy
Like many poor countries, the Indian government has a track record of creating policies that do real harm to its most impoverished citizens. Under the current PM of India, large bank notes were made illegal – people were forced to exchange the old notes in a process that was painfully slow and poorly organized.
Most members of the Indian middle class use the banking system, but the poor are shut out of the established financial system by a series of gateways that make it difficult to access basic services. The result of this is a large cash economy, which was the target of the banknote ban.
Cryptos are a near perfect technology to address underbanked populations, which makes India's continued resistance to the technology look predatory, and abusive. Instead of dealing with a system that is designed to punish the poor for their poverty, cryptos allow anyone to access advanced financial services with an inexpensive smartphone.
Easy to See Underbanking as a Social Disease
Access to financial services should be a right, not a privilege. When people are forced into the cash economy by their poverty, everything becomes more expensive, and their struggles are magnified by underbanking in their community.
With the advent of DeFi and microlending, the need for responsible crypto regulations in India is even more pressing. Access to capital in poor communities is nearly non-existent, and DeFi could radically change how money is lent at the most base level of the global economy.
PM Modi has shown that he has, at best, contempt for the poor of the Indian nation.
If these kinds of anti-crypto laws continue, it would be fair to assets that PM Modi is out to destroy the economic ability of those Indians who are most in need of financial assistance in the form of access to basic financial services.