In the Kumble Vs Kohli fight, it was Kohli who came out as the immediate victor since BCCI accepted the principle that Coach is dispensable but not the Captain. BCCI upheld the principle that a Coach is only a PR manager and if he is a good friend to swim with and drink with for the players, he should be preferred over a disciplinarian who wants “Performance” over the field and a structured process to reach a good stable performance level for the team.
In the Bitcoin battle, I see a similarity. The technology oriented school of thought is that Bitcoin is an “Innovative Technology” and it needs to be adopted as otherwise the country will be left behind. This is like Kohli’s school of thought that he as the team captain is the king and his word is the law. On the other hand, there is another school of thought that Bitcoin is not good for the economy and its technology needs to be put through a process at the end of which we need a stable contribution to the society. This is like the Kumble’s version that Captain needs to be placed on track with a team and strategy for which the Coach should be accountable.
In the place of BCCI we now have the Task force of the Ministry of Finance and just as Mr Ravi Shastri whose shadow of influence is perceived in the whole Cricket drama, we have ZebPay’s shadow of influence appearing to use all its PR skills to drag the Task Force decision in its favour.
In the early stages of this controversy, I suggested that the members of the Committee of the Finance Ministry who were tasked with this Bitcoin regulation should declare that they donot have any stakes either in the form of holdings or otherwise of Bitcoins. Now this needs to be applied to the “anonymous Task Force” which the Finance Ministry has created which has so far had several anonymous discussions with ZebPay. I hope this request would be considered by the Government of India and the members.
Otherwise we need to wait for some “Ramachandra Guha” on a future date to spill the confidential discussions with ZebPay and we need some “Arnab Goswami” to draw the public attention on what transpired in these “Anonymous Discussions” about the “Anonymous Currency” by the “Anonymous Task force”.
However, while Kumble-Kohli drama was a game of Cricket and even if we had to lose one game against Pakistan to prove a point that Captain is bigger than the Coach, the country is not going to dogs. But the game of Bitcoin is different. It cannot be thrown away like a Cricket match. We need to fight til the end and even beyond even if ZebPay has its way for now.
This is because, the Bitcoin fight is not against the technology of Bitcoin (Block Chain) or the Ethereum technology which is said to be better or even some others like the Ripple. It is the fight against Black Money and instruments that can be used to acquire and use unaccounted wealth.
If ZebPay has its way and gets Bitcoins and all Alt Coins legalized, then all those who are presently holding them anonymously and will acquire in future will have a means of using the Bitcoins in the physical economy and covert our physical goods into Bitcoins which will be held at different Bitcoin wallets anonymously. When a Car is sold against Rupee the dealer’s revenue comes into the Indian Banking system and there will be GST or whatever tax is paid their on. But when a Car is sold for Bitcoins, India is at the mercy of the dealer who may declare and deposit it within the Fiat system or chose to hold it in a Bitcoin wallet abroad which our law enforcement will not be able to touch.
ZebPay will say that they will have KYC and collect the details of the buyer and seller. Even today we expect that our Banks are doing KYC for their accounts. Even Aadhaar is doing its own KYC before issue of the ID. But despite the intentions being good, Banks and even UIDAI often find that their KYC fails. Mobile service providers are no better. If these agencies have not been able to maintain proper KYC , how will ZebPay guarantee that they will provide impeccable KYC for their transactions? Just because they note down the PAN number as declared by the account holder, does it bar the customer from declaring a PAN number stolen from some other source?. During the demonetization drive, a number of “Poor” JanDhan account holders became rich overnight because their physical society masters parked their Black Money into their accounts and converted honest citizens into money mules. Our respectable Bankers did their bit to create false old currency holder’s identities to exchange new currency. Many Cooperative Banks under the control of politicians were excellent in converting old currency to new through their Banker credentials.
Knowing all this if we trust ZebPay and Coindesk or Coinbase to carry out reliable KYC, then we should be first grade fools. I am sure that the Task force does not consist of such gullible persons.
Also, even if the first level of transaction with a Bitcoin exchange does actually conduct proper KYC, there are many methods to anonymize the transactions before and after the exchange transaction so that the traders will be “Bitcoin Mules”. We know that many havala operators finance people to travel to Singapore or Dubai by air just to carry some goods from here to there and bring back some thing else from there to here. We will find versions of these in Bitcoin laundering for which the exchanges will not accept any responsibility.
It is therefore clear that legalization of Bitcoins as well as other AltCoins not controlled by the Government will be a boon to all black money holders who are now looking for an alternative to Swiss Banks.
This will defeat Mr Modi’s efforts to curb Black Money and also fake money created by Pakistan and circulated in India.
If any body wants to challenge this hypothesis they are welcome.
I therefore consider that the present Bitcoin battle is a battle between the Black Money owners of India and Mr Modi. ZebPay and others may be willing partners to such efforts just as some Banks tried to help out Politicians and other Black Money owners to convert holdings of old Rs 500 and 1000 notes which were demonetized.
I suppose the battle of ZebPay Vs Modi will be more skewed towards Modi than the Kohli-Kumble battle and the other influencers will not be able to tilt the scale in favour of ZebPay.
While Modi is out in USA in the next week there is every possibility that the task force may try to slip in some notification to appear as if ZebPay will be the winner but if this happens, then sooner or later we will definitely also see a reversal of things since this is a battle that Mr Modi cannot afford to lose.
Whether Mr Arnab Goswami takes up the fight against Bitcoins or not, Naavi.org will continue its fight with the hope that even if battles are lost, the war would be won. Victory has to be ultimately for those who are trying to eliminate Black Money which is also linked to elimination of corruption in India which itself is the key to the future growth.
Naavi
10 years back, like how traders fighting about eCommerce because under LST /VAT there was no provision to regulate these people. Online people used to make lot by selling goods in crore w/o any tax paid. GST is now includes eCommerce people to deduct 1% TCS on sales / KYC will come under Govt scanner. Zebpay / Unicoin there are 10-12 wallets in India can bring under GST TCS 1% & TDS 10% then all can be legalized under law
Collecting tax is one aspect of regulation. Like we have amnesty schemes for declaration of black money we can have a self declaration scheme for one time regularization of all honest acquisitions and profits made out of it. But holders need to first dispose off their holding and approach the Government with a declaration and pay tax as may be available. Many of them may not have tax if they have suffered loss.
There are other problems associated with Bitcoins.
It will definitely be an instrument for holding black money. KYC at exchange level is important but is not sufficient to prevent use of Bitcoin for holding black money. It is in this context that any legalization of Bitcoin would unleash a flood of conversions from rupee to Bitcoins and further anonymization through sales to fake accounts so that the holdings will remain anonymous.