India’s looming ban on crypto would be akin to banning the internet and could undermine the country’s economic development, according to former Coinbase CTO Balaji Srinivasan.
In an interview with The CapTable, Srinivasan said a blanket ban on bitcoin and other cryptos would simply push trade revenue into other markets in the region.
He said, “It’s really important that the ban should not go through. It would be a trillion-dollar mistake for India, without exaggeration.”
An anonymous senior Finance Ministry official last week told Bloomberg that the proposed ban would most likely become law, but assured that crypto investors would have three to six months to convert their funds back into fiat currency.
The Cryptocurrency and Regulation of Official Digital Currency Bill, which was introduced in late January, also outlines a plan for the issuance of a central bank digital currency.
Srinivasan said India could end up poorer if it follows through with the ban, which in many ways would amount to a reversal of liberalization: “India could get 20% poorer from what it could have achieved over the five-year term. It is almost like banning the internet for five years.
“The losses add up a lot. It would be a reversal of economic liberalization in many ways. It would basically be banning the financial internet from entering the country. And it wouldn’t even achieve the desired objective.”