The short answer to the India Crypto Ban question is, NO. If you want to know more about why India cannot ban cryptocurrencies then read on.
First, let’s make a clear distinction between blockchain and cryptocurrency as I would use both these terms in this article. Here is the layman way of putting this:
People run an algorithm on their system that solves equations. Every successful solution gets a block added to a decentralized network called the blockchain. Since this is decentralized, you need multiple people from all over the world to run these algorithms on their machines. To incentivize more people to continue running the algorithm which would help maintain the network, each blockchain offers its own cryptocurrency with which people can exchange it for fiat money or use the crypto to buy stuff directly.
For example, Ethereum is the name of the blockchain and its native cryptocurrency is called Ether. Likewise, Bitcoin (upper case B) is used to refer to the blockchain network, bitcoin (lowercase b) refers to the cryptocurrency.
Indian banks have been actively exploring ways to ban cryptocurrency in India. Forkast reported recently that HDFC has sent emails to customers warning them about the virtual currencies. SBI also did the same. But more recent reports from Indian Express, as of June 11th, have indicated that the Indian government is willing to consider virtual coins as an alternative asset class and are also choosing to regulate crypto.
But coming back to our topic, if needed, could India have banned crypto? Now let’s dive into this:
India Crypto ban – The only way possible:
For the blockchain network to work all you need is a computer or even a phone with good internet access. So for a country to effectively ban blockchains, it would have to stop providing internet access to the people living in the country. It would be chaotic and would have catastrophic repercussions which the government would not want to encounter.
That is it for this section, banning the internet is the only way to ban crypto and that is something no government wants to do.
But there is one way that governments can come close to banning cryptos.
What can the Indian government do against cryptocurrencies?
We have established now that India cannot ban cryptocurrencies altogether. Now let’s look at a feasible option for the government if it chooses to ban crypto.
Cryptocurrencies can be marginalized. For example, India can ban the crypto exchanges such as Binance, Coinbase, Wazir, etc. If these exchanges are banned, then people do not have a viable medium through which they can convert their fiat currency into cryptocurrency. There are even ways to overcome this, but most beginners or people just scratching the surface would not look at those alternate methods and give up easily.
If people in a country are banned from accessing services that converts fiat money to crypto then it is the closest a country can come towards banning cypto.
Now let me tell why governments should not consider the above solution.
Blockchain and Governments need to work together:
There are so many other articles that are a good source of knowledge on this topic and instead of me explaining the benefits of governments using blockchains, here are some links:
The current monetary system is fucked up. Even if some of you are adamant that blockchain is not the answer to our problems, it at least offers us a chance to make a collective decision on matters of importance. I can live with the fact that our collective decision has either ruined or improved our lives. Rather than trusting a few people at the top neither of whom have any history of good decisions when it comes to maintaining our economy.
If you feel you have something more to add to this discussion or you want to oppose my points then please do share it in the comments section below. Let’s learn together.