The distributed ledger, a functionality of the blockchain, the technology underpinning cryptocurrencies, has many potential uses that India would be foolish to forsake, for fear of possible misuse. That the prime minister held a meeting on cryptocurrencies shows attention at the highest level of government.
The concern over possible use of cryptocurrencies for money laundering and terror financing is valid, and Indian law enforcement has to develop the technological savvy to monitor cryptocurrency flows. The fact remains that US law enforcement was able to track and recover a goodly part of the ransom hackers extracted from the owners of Colonial Pipeline for resuming flow of fuel in that key part of America’s oil logistics, in May this year.
That ransom had been demanded and paid for in bitcoin. The scope for subversive activity is but one part of the cryptocurrency story. Two other parts remain. One is the fancy many retail investors have taken to cryptocurrencies, in the expectation that their value can only go North.
The government should make it clear that if people choose to gamble with their savings and end up losers, they have only themselves to blame and that the government has no responsibility in the matter. But, cannot the government ban cryptocurrency?
The underlying technology is useful to have its development suppressed by bans. Cryptocurrencies are useful as a payment mechanism that incorporates smart contracts and for swift cross-border payments. This capability must be nourished and developed.