Bitcoin is the future of currency if government, banks understand and regulate it: Experts 

Representative image (Pixabay/tombark)

 The cryptocurrency debate has been heating up. Exchanges, users, regulators, investors and entrepreneurs have been weighing in on how India can use and regulate crypto. To understand the future of cryptocurrency in India, Moneycontrol’s M Sriram and Chandra R Srikanth hosted another episode of Crypto and India—The Road Ahead on Twitter Spaces.

Speakers in the session included Monark Modi, founder and CEO, Bitex; Gaurav Dahake, founder and CEO, Bitbns; Akshay BD, angel investor, and Rishi Anand, partner at DSK Legal. Here are the takeaways from the session:

 Bitcoin stance around the world

Gaurav Dahake: There was no clear stance on crypto, many countries didn't know what was allowed, what was not allowed, if mining was allowed, if trading was allowed. But as crypto has a $1.5-trillion market right now, we are seeing that countries have started taking a stance.

Bitcoin mining in China

Dahake: China has taken a stance around Bitcoin mining per say, one of the reasons is environmental. As bitcoin mining is being decentralised, it is removing the risk of geopolitical dependency on a nation.

 Akshay BD: When you push out a bunch of miners from China, they will immediately relocate to other parts of the world. In fact, today there are pictures on Twitter of the mining equipment being air-lifted from China and being relocated to Maryland in the US.

Also read: Cryptocurrency Prices Today on June 24: Bitcoin, Ethereum tumble; Dogecoin in green

Decentralising bitcoin network

Akshay BD: You are getting both sides of the spectrum. On one side there is El Salvador that wants to mandate the use of bitcoin in its domestic economy and now, implementation notwithstanding that seeks to exercise some amount of control on the network positively.

Bitcoin is a deeply decentralised network that is grappling with centralised control.

Also read: Millennials and cryptocurrencies: A story of missed profits, hard lessons and losses

Global war

Rishi Anand: There is a global war going on right now between the government and the technology companies. Any government controls their country or economy through controlling currencies as well.

When there is a parallel currency which is going at a global level, the government in India or across the world, right now, is struggling to be at par with the development of this technology.

Regulatory arbitrage

Monark Modi: Governments act in a very different way. Governments in different regions have different policies. Cryptocurrency is transparent yet one can remain anonymous and make a transaction. As the community grows, it becomes essential to stop transactions that are not tracked by governmental bodies.

Also read: PayPal, Visa lead $300 million investment in Blockchain Capital

Concerns about bad actors

Rishi Anand: There is concern as a lot of cash money is being pumped into the digital exchange and it's being moved from one country to another country.

There are some concerns that are making the regulators wary because in this day and age disputes between two countries can be funded through these channels.

Advice to young entrepreneurs 

Rishi Anand: Educate the government. For example, when we started the e-commerce business seven-eight years ago, the government did not know how an online marketplace would work and what is the role of a market player.

Are banks co-operating?

Monark Modi: We need to look at it in two different ways. One is money laundering that is happening within and outside the country. Anti-money- laundering policies that are set up by the exchanges do look on the transaction monitoring part of it. Banks are not cooperating now because they are not very sure of how the transaction is taking place within the country.

Lessons from Singapore

Akshay BD: They gave the industry a seat at the table that allowed them to have a sophisticated regulatory framework as opposed to one that is not enforceable or practical.

Blockchain  

Rishi Anand: Banks are expressing the need for an interbank ledger that is public and transparent. It sounds like a public blockchain but why are they doing this? Take any credit scam like Nirav Modi or (Vijay) Mallya, the common thread was there was no common ledger to track if some of them were duplicated and how much data was there against them.