Can you really ban crypto?

There are a lot of people who hate cryptocurrencies, think they are a scam and want to ban them outright. Our own Indian government seems to have taken a dim view of the Bitcoin revolution. All this is easier said than done and crypto probably is here to stay.

For all its ups and downs (when doomsayers declare its death), you have to realize that on New Years Day in 2009 all the cryptocurrencies in the world were valued at zero because they didn’t exist yet. From there they went to be valued at trillions of dollars, which is like a separate large country. Remember stock markets and commodities too see fluctuations, not just crypto.

Another thing is that everyone’s in on it. Techies. Billionaires. Common folks. Government officials. In the last few years, millions have been investing in them. I would say we have reached a point of return thanks to them. Now crypto is not really an investment but a currency to exchange so the latter is the primary purpose. When most people realize this fact, these currencies will stabilize.

We first had barter and that concept still exists. Then gold was used, and the fascination continues. Coins and currency notes are both in circulation. The gold standard was delinked from the currencies but that didn’t really affect gold sales, especially in India. Digital currencies and cryptocurrencies followed. Now they all co-exist (with their own ups and downs).

On the whole having all these means of exchanges of money is great for citizens and global commerce. It gives flexibility to the financial system. It’s imperative that money keeps moving. Every innovation like ATMs, credit/debit cards and off late UPI helps the flow of money.

The problem with banning crypto is that you really can’t do it. If you ban trillions of dollars overnight, they will not vanish. You will merely push it underground. It will become the delight of the Dark Web, criminals and bad characters. The circulation will continue, and for all you know, the value may actually increase. The countries that ban them may find themselves at the receiving end.

Remember the war on drugs in the US in the 1970s? What happened? Today the US is the drug capital of the world and has reached alarming proportions. The only solution is to promote everything. Barter. Gold. Coins. Notes. Digital currencies. Cryptocurrencies.

India started to join the global mainstream after the Liberalization of 1991. In the last decade or so it has made great progress recently becoming the fifth largest economy in the world. It would be a good thing if the Indian government could somehow regulate and integrate the crypto revolution withing its system.