Balaji Srinivasan, former CTO of Coinbase, believes the imminent cryptocurrency ban in India will be akin to internet blocking and could cost the country trillions of dollars in potential profits.
In an interview with The CapTable, Srinivasan said that the bank’s ban on bitcoins (BTC) and other cryptocurrencies would simply redirect trading revenues to nearby Asian markets, making India a “trillion dollar” mistake:
“It is very important that the ban (India’s plan to ban owning, trading, mining or investing in cryptocurrencies) is not respected. Without exaggeration, that would be a trillion dollar mistake for India. ”
An anonymous senior Treasury official at Bloomberg said Thursday that the next ban is likely to happen, showing that cryptocurrency holders will have three to six months to turn their money into legal tender.
The cryptocurrency and regulation of the Official Digital Currency Bill was introduced at the end of January, and it also lays the foundation for an official digital currency issued and controlled by the Reserve Bank of India.
Srinivasan, an angel investor and entrepreneur, suggested that India could become 20% poorer than it will be in the next five years if the ban is respected. Former general partner of Andresen Horowitz said that the cryptocurrency ban would effectively stop the spread of the “economic Internet” in India:
India may be 20% poorer than it might in five years. It’s almost like blocking the internet for 5 years. The losses add up. […] This would be a reflection of economic liberalization in many ways. In essence, this would block the access of the economic Internet to the country. It will not even achieve the desired goal. ”
While the ban applies to all cryptocurrency holders, the impact on individuals may be less than on traders and companies. By using cold storage and maintaining control over their private keys, grassroots Indian citizens can still avoid any anti-crypto laws, but they will naturally face difficulty when trying to withdraw funds.