On deeper thought Indian budget announcement is a boon for crypto-currencies?
Budget announcement: Crypto-currencies are not legal tender in India.
“The government does not consider cryptocurrencies as legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities, or as part of the payment system,” Jaitley said.
By declaring that tokens are not legal tender, India basically said you can’t use these tokens to settle debt of others as a compulsion. Basically it is not a currency. That’s a Master stroke from the budget for the block chain world as it then eliminates a lot of regulations that could have applied to crypto.
Further the announcement said that all illegal activities within the system will be curbed. Cleaning up the cryto-economy is infact a critical first step for the system to go mainstream. Every new technology revolution has it’s own irks. Every technology can be used negatively like a car can be used to run away after robbing a bank or cause accidents. A knife or guns can be used to kill people. The spirit of regulation has to ensure that the true value of innovation does not get lost while integrating new technologies into society. The fact that crypto-currencies was mentioned and two generic statements were made. First, that it is not legal tender. Which was obvious without saying. And secondly, the illegal activities will be curbed, again generic. I think government understands the power of blockchain and distributed ledger technology just like the internet. I don’t see how we can eliminate crypto-currencies from the payment system in the long run as the world economy increasingly will shift to borderless smart contracts. I think we are still in the very early era of this technology and both the industry and the government will have to show patience for it to mature. Purging the illegal transactions will actually give more time for the industry to mature.
If we have to solve problems of humanity we need to innovate. And funding global innovation is not easy. If we don’t have tokens then you can’t fund innovation. Software is eating the world industry by industry. Some of the largest players in many industries are actually virtual and don’t own any assets. Crypto-currencies are rapidly morphing into community coins called ‘faircoins’ that ensure that such monopolies are borderless and community driven instead of private cooperations maximising profits instead of public good. The old corporate structures can’t deal with such large network driven innovations at a global scale. Faircoins are basically crypto currencies that have very large coin distribution and very low centralisation driven by crowd airdrops. Environment and technology in crypto-currencies are both rapidly evolving every quarter. Most world governments are patiently waiting for this space to mature. It is truly the early days of the Internet. Its better to not make any judgements. It would be akin to banning internet in 1990 because of porn. Let’s not jump to conclusions and give it time and space for clean up.
