In the wake of India’s recent cryptocurrency bank ban, billionaire bitcoin evangelist Tim Draper believes that this could be one of the most regressive moves made by the country.
In early April, India announced that it had banned banks from dealing with cryptocurrency businesses, effectively cutting off money supply for anything related to that industry. However, Draper differs from this opinion and said that if he had a chance to meet with the country’s Prime Minister, he would explain the “huge mistake” which the Indian government is making.
Draper’s Stand For Bitcoin
Speaking in an interview with Economic Times, Draper said that such a hostile move could prove to be bad for India in the long run. He further added that the country would face a serious case of “brain drain,” as talent in the cryptocurrency space would find jobs and livelihoods in supportive nations.
“The government needs to realize that it is stifling innovation and should instead be creating an environment where these ideas can be tested and promoted. They have the choice to be trendsetters and attract the world’s best engineers and coders, or lose their best and brightest to other regions,” said Draper.
The case for brain-drain can be true, as Europe, U.S.A., China, Japan, Hong Kong, and even Mexico are amongst countries who are actively testing blockchain and cryptocurrency systems, and they could end up attracting skilled talent from all across the globe.
His comments are a response to the Reserve Bank of India’s recent move against cryptocurrency. The ban also includes all financially regulated bodies from partnering or transacting with any cryptocurrency related business.
Following the move by the Reserve Bank of India, cryptocurrency exchanges in India experienced a surge of activity on their portals, with massive panic selling all across the board. Prices of bitcoin and ether dropped to $5,300 and $300 respectively, but have rebounded since.
Bitcoin To Be The Future Currency, Says Draper
Draper, who famously bought close to 30,000 BTC from the U.S. government auction after the Silk Road seizure, is an active speaker in the bitcoin space and evangelizes the technology. Through his venture capital company, Draper holds small stakes in various cryptocurrency businesses.
On being asked about bitcoin’s feasibility as legal tender, Draper said, “Bitcoin is global, can store value. Within two to three years, I think it will be acceptable everywhere for transactions.” He also added that the Indian government is deeming cryptocurrency as invalid tender is “the stupidest thing to do.”
India’s Move Fundamentally Void
If one looks at the constitution of India, Articles 12 & 13 immediately draw attention to a few startling points.
According to Article 12, any authoritative body under the Indian Government is to be treated as a “state,” which means it has all rights and powers to operate the same way as a geographic district or county. In the very next page, Article 13 consists of the “Laws inconsistent with or in derogation of the fundamental rights.”
Since the RBI is considered to be a “state” under Article 12 of the Constitution, the law prohibits any entity taking away a citizen’s fundamental rights; it is safe to say that the RBI is essentially forbidden to place such a ban on the country’s budding cryptocurrency industry. The act itself is “void” under parliament rules.
While this is in no way a legal take, it does seem ironic that a country’s governing body broke some rules to set new rules. And in this case, using a 1949 lawbook to determine a 2018 technology.
In Draper’s words, “huge mistake.”