India lifts ban on cryptocurrency trading | Hacker News Reader

India lifts ban on cryptocurrency trading

techcrunch.com

209 pointsjmsflknr38 comments

Successive Indian governments fail to realize that protectionism and capital control in reality have the exact opposite effect of what they intend. (after-effect of British raj once bitten twice shy)

They tried to stop capital flight but instead people just started doing Peer to peer FIAT transfers (WazirX owned by Chinese Binance) and trading via offshore LLCs.

India needs to stop being a nanny state... In fact in a truly free market Indians will often outperform global peers.

Being able to accept payments in crypto is a blessing for Indian firms looking to corner the global blockchain services and consulting market.

Indian being a nanny state is an understatement. The govt simply has (and always had) a high distrust of its citizens (emanating from the british raj). Things have improved somewhat but as recent as 2015-16 you had to get your documents attested from a pretty high ranking govt officer for simple stuff in life and then also bring in the originals. If it was an online form, you’d submit it then print it and then send it by post. It is not a hard task to imagine the govts attitude when things get complex and require nuance to fulfil.

On top of that the society in general has become cynical. The media is constantly negative. This just leads to a vicious cycle where the govt just becomes more distrustful of its citizens. I don’t know who came first - a cyncial govt or a cynical society. But right now its a catch-22 which frequently impedes progress in the country. Even for the situations where the society and govt manage to break this deadlock is not celebrated and acknowledged much. They are simply outgunned by the negative stuff and India being as large and diverse as it is, negativity is aplenty.

The current ruling party (for all its other faults) managed to improve this somewhat and at the same time managed to create another set of problems - chief of which is creating a state of you vs me (in every fucking conversation and discourse)

Indian state (or the society) simply can’t shake off being a nanny.

"Indian being a nanny state is an understatement"

To a non-Indian who's never been there, that sounds odd, because "nanny" implies to me a level of control that I didn't think existed.

I assumed it was for a different reason. The disappearance of 500&1000R notes meant that bribes required another govt approved form.

It is worth noting that the initial ban predated by a couple of months to when they replaced all currency bank notes : https://www.bbc.co.uk/news/business-37906742

It had also removed higher value bak notes two years prior: https://www.washingtonpost.com/world/2018/08/29/india-replac...

Both initiatives born out of curtailing criminal activities of various kinds at the time.

So the crypto ban happened during this period and may well of been born out of that initiative against crime more than anything else and now that things have settled down, the need for the ban became moot.

At least that is my thoughts upon this.

From talking to Indians the criminal element and the politicians in power were aware of this happening in advance so had already converted. Others powerful people did it after the baby with the help of corrupt bank officials that helped them back date stuff. So only the middle class bore the brunt of this.

The middle class and everyone below the middle class.

> Both initiatives born out of curtailing criminal activities of various kinds at the time.

It is a well-accepted fact that demonetization was a sham at best, a scam at worst.

> So the crypto ban happened during this period and may well of been born out of that initiative against crime.

Again, what peculiar crimes exclusive to India are you alluding to that are suddenly extinct now? The ban was lifted because a successful court petition ruled the government is paranoid at best and out-of-touch with reality at worst wrt crypto.

At least, that is my thoughts upon this.

>Again, what peculiar crimes exclusive to India are you alluding to that are suddenly extinct now? The ban was lifted because a successful court petition ruled the government is paranoid at best and out-of-touch with reality at worst wrt crypto.

I wasn't alluding to any particular crime and the article does mention some forms, though perhaps better explained by: https://www.bbc.co.uk/news/world-asia-india-37974423

As another reply outlined, this did not impact the organised level of crime and only the middle class and below, as sadly most initiatives seem to effect, however well intended.

The article you cite was written just after demonetization was announced. It simply speaks in the tone of hope and optimism from a journalist far removed from the ground realities. The aftermath since then has left no doubts that demonetization didn't do anything to curb any sort of tax crimes, whatsoever [0]. Heck, a well-respect economist at the helm of the most important financial institution in India, the RBI, resigned, possibly in protest [1].

> As another reply outlined, this did not impact the organised level of crime and only the middle class and below, as sadly most initiatives seem to effect, however well intended.

Yeah, exactly: That's text-book sham.

[0] https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis...

[1] https://en.wikipedia.org/wiki/Raghuram_Rajan#Controversies

Well, journalist main task is to inform objectively, not to comment subjectively. They aren't researchers or economic analyst. And on other hand, most politics decisions are based on feelings, not facts.

Could you cite more primary sources? It looks like India related entries on Wikipedia were totally hijacked by paid wiki moderators[0]. Now I cannot trust any India related entry on Wikipedia

[0]http://www.opindia.com/2020/03/delhi-anti-hindu-riots-wikipe...

OpIndia is a Brietbart-esque website. I trust the Wikipedia moderators more than OpIndia "journalists", who, not long ago, called for "war to defend the Hindus".

The systemic way in which the neo-facist government is taking control the narrative by tarnishing trust in institutions that have stood up well to scrutiny is unnerving.

> Could you cite more primary sources?

I'm pretty sure any primary source that doesn't fit a narrative would be dismissed as non-trustworthy because OpIndia wrote an "investigative" piece that refutes those sources, or because a prominent right-wing person tweets questioning the legitimacy and dismissing it as "fake news"? The incumbent is playing abhorrable politics.

> Now I cannot trust any India related entry on Wikipedia.

Sure, trust OpIndia instead? The standard bearer for journalistic ethics.

"It is a well-accepted fact that demonetization was a sham at best, a scam at worst."

Are you speaking as someone who experienced it firsthand and still lives there?

This is a court ruling, not applicable to what you are trying to imply.

I was discussing a possible reason for banning it in the first place.

NOT the court ruling about lifting that ban, as You implied.

Makes it a bit more difficult for counterfeiters to debase the currency if you only allow smaller bills... The counterfeiters may be individual or state actors engaging in an economic attack.

Bitcoin can't be counterfeited, so it solves a $100 billion dollar problem.

You make some excellent points and I agree. Though perhaps the wrong thread-branch to make that point.

Interesting correlation pattern speculation :)

Echoing a comment below, with the fed lowering rates again it seems like loose money is here to stay for a while. I wonder if this will help eventually push adoption for cryptocurrency. Now I'm not a crypto-currency nut, quite the opposite, and I generally think blockchain is pretty useless, but you do have to acknowledge digital currency is finding uses in venezuela and a pocket of other countries where trust in the monetary system has completely collapsed. Continual low rates and high debts will for sure not wipe out trust in the financial system overnight but it definitely doesn't help

Being harder money isn't enough. Orthodox money has the spiritual backing of the world order - the industrial-era concepts of hegemony and warfare unto imperialism.

Blockchain tech needs to show some real, actual functionality - a complete and cognizable web3 stack - in order to be a critique on the level required to actually change (or replace) monetary systems.

Good. There is finally some competition to the Hawala monopoly, for squirreling away India's wealth (it also doesn't involve sending slaves to the Middle East for counterparty trades).

I think cryptocurrency trading is one of those things like drinking that is counter productive to ban even if you don't like it much. Better legal and regulated.

Crypto trading garnered everyone’s attention when Bitcoin kept rising upto $20k and there was a huge FOMO.

During that time, there were a lot of Get Rich Quickly scams around Crypto trading. Coupled with 24x7 online trading, a lot of people were losing a lot of money. Taxation (for those who made money) around Crypto weren’t clear either.

An exchange ran away with the money. There was also the money laundering aspect. The Govt also wanted to curtail cash usage (Demonetisation happened) and track the transaction trails.

Not saying if they are right but some of these reasons were triggers for the original ban by RBI.

Casinos are banned in majority of Indian land and i’m wondering if the reasons are the same. Would be interested to know what the Supreme Court thinks about that in the current world.

I was curious why they banned it in the first place. From the article:

    "At the time, RBI said the move was necessary to curb ring-fencing of the country’s financial system."

    "It had also argued that Bitcoin and other cryptocurrencies cannot be treated as currencies as they are not made of metal or exist in physical form, nor were they stamped by the government."

The second argument is beyond weird as most currency isn't material these days, including India.

It's also worth noting that the ruling doesn't seem to have had any kind of effect on Bitcoin's price.

Maybe the news is too fresh ... time to buy !

No country is recognising them as actual currencies, because once you do it, that opens a whole lot of other issues for the country, suddenly they could lose control on their money supply and that's a potential threat to their sovereignty. It's much easier and safer to consider them as assets.

If they had ever approached even the slightest level of acceptance of gold they would have been okay as assets.

Now its more like betting at the track. Except that the track is probably more regulated and insiders are less crooked.

For now I agree, right now it's pure gambling. However it's still pretty early to say what will happen in the future about the cryptocurrencies.

That's simply not true; Bitcoin is recognised as a currency in Australia and Japan for instance. Banning cryptocurrency doesn't prevent a country from losing monetary sovereignty; people could still just switch to another national currency, like US dollars. This actually happened in Zimbabwe and Venezuela.

The title probably should say that the Indian Supreme court quashes the ban on crypto imposed by the Government. It is most likely that the Government will appeal against the ruling, because they seem not in favour of having crypto.

Crypto is the future regardless of regulation, denying it is like the people who denied the internet taking off and social media would take off when we had MSN back in the day.

Good on India for doing this.

I wonder what impact this will have on the value of various crypto currencies?

I wonder if this has anything to do with the fact that COVID-19 was just confirmed there.

Nothing to do with that. This was Supreme Court decision and government will probably challenge it.

Even if Cryptocurrency helps in some dire situation arising out of COVID-19, facilitating cryptocurrency would be lowest of priorities for the government.

It almost certainly doesn't. COVID-19 is looking more and more tame by hour as cases resolve and fatality rates drop. There's fewer active cases today than yesterday, and fewer still than the day before. We're 34% off peak number of active cases. Cryptocurrency is as scammy as always. Not sure one would distract from the other.

> COVID-19 is looking more and more tame by hour as cases resolve and fatality rates drop. There's fewer active cases today than yesterday, and fewer still than the day before. We're 34% off peak number of active cases.

Source?

https://www.worldometers.info/coronavirus/ which lines up with the Johns Hopkins dashboard posted here recently.

That's not true. You're looking at the China numbers which are subsiding. https://www.coronaviruschart.com/

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