Last week, the central bank of India announced that it has blocked banks from doing business with entities transacting cryptocurrency. The decision dampened the spirits of both investors and entrepreneurs in the country, and showed the lack of understanding on the part of regulators. Now, tech investor Tim Draper has come out in opposition to the decision, calling it a “huge mistake.”
Draper had only recently gotten back into India’s trading market after the country’s prime minister, Narendra Modi, made a public vow to crack down on corruption. In an interview with The Economic Times, Draper is quoted as saying, “If I had a meeting with Modi, I would have let him know he is making a huge mistake,” adding that not viewing cryptocurrency as legal tender is “the stupidest thing.”
In Draper’s opinion, Bitcoin and blockchain technology have the ability to change how businesses operate, and opines that they are “best things to have happened for business.” He suggests that India, in particular, can benefit greatly from the technology, due in large part to what he sees as a superfluous amount of inefficiencies. These inefficiencies result in losses in the millions for the country. By Draper’s estimation, blocking digital currencies in India will only result in investors and blockchain entrepreneurs turning to other countries.
In the interview, Draper also went into detail about blockchain’s potential to turn the venture capital business upside down. This would create a highly competitive environment that would reward only those that are flexible and can continue to offer new products. “Down the road, you won’t have to physically leave a place to choose a better government. From wherever I am, I can get social security from Chile, healthcare insurance from Canada, education from Russia. The whole system will be much more virtual,” he said.
Draper is a huge fan of Bitcoin who believes that the world’s number one digital currency should be the national currency in India. This stance, however, could put his return to the Indian market in February 2017, after leaving a year earlier, in jeopardy. India’s Ministry of Finance often refers to cryptocurrency as a Ponzi scheme that has no intrinsic value.