Banning Cryptocurrency is a Terrible Idea

The RBI released a notification recently on virtual currency. In essence, the central bank is trying to ban cryptocurrency in India:

In view of the associated risks, it has been decided that, with immediate effect, entities regulated by the Reserve Bank shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs. Such services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer / receipt of money in accounts relating to purchase/ sale of VCs.

For those who are already engaged in the practices mentioned above, the RBI has given them three months to exit it.

This form of blanket ban has been feared for sometime. There were whispers that such a daft move would be done and the RBI didn’t want to disappoint. They have carried out the ban in order to protect consumer interests, market integrity and to prevent money laundering.

There are several problems with this:

  1. Ineffective: Such a ban will be completely ineffective. By its very nature, and as the name suggests, cryptocurrencies are hard to track and provides anonymity for its users. How does the government actually plans to ban it?
  2. Loss of control: By not banning it, RBI had a better chance of regulating some aspects of cryptos. Now, it has lost all control and all the transactions will go underground. Those who want to use Bitcoins will continue doing so by using cash, or other discreet financial instruments to trade. And as Rahul Matthan says in his editorial, “The only people who abide by the terms of a ban are those who always intended to use the service for legitimate purposes”.
  3. You can’t have one without the other: The government, it seems, is quite keen on developing and using blockchain technology for various public purposes, such as maintaining land records, public health records, etc. However, the best use case of blockchain is cryptocurrencies. By banning one, there will be no innovation and test cases of blockchain in India.

It will be interesting to see how this pans out. My guess is that RBI will soon realise that it has no control over this and will backtrack on this move. However, it might have already set a bad precedent and the narrative that these are inherently dangerous and risky.

Cute Cats Are Good for Online Activism

Ever wondered how social media has helped activism in your country? Ethan Zuckerman, an American scholar and activist, coined the “Cute Cat Theory“. This helps make sense of why online movements succeed, especially once they are banished from the web by unhappy governments.

According to this theory, social media is the best stage for activists to rally the masses for a political cause – exactly because the people who visit these websites are there to browse mindless content and not to rage against the system. Digital activists can use these platforms to have easy access to generate mass awareness, and also not be targeted by the government for posting unwelcome content.

And so, although a majority of us who visit Facebook do so to stay connected with our friends or to browse cute cat videos, digital activism is likely to get more traction on these platforms than anywhere else on the web.

Story time!

In the early 2000s, dissatisfaction in Tunisia against its President (Ben Ali) had escalated to a boiling point. Various activist groups started chronicling the shortcomings of the Ali government online. This was also a way of rebelling against the highly authoritarian Tunisian government, which would often censor the internet and online speech. In 2009, when certain dissidents called “Astrubal” posted a video concerning the President on Dailymotion, the government took down the site almost immediately. As knee-jerk reactions go, this is classic – the Tunisian government responded defensively to an action as soon as it could so that any hint of dissent is curbed.

However, this plan backfired because of – you guessed it – the Cute Cat Theory.

Although Astrubal’s footage had received only a few thousand views before the site went under, the abrupt, arbitrary unavailability of Dailymotion to the other millions of residents of Tunisia only ended up creating more publicity for this footage and ultimately, sufficient traction to end Tunisia’s regime under Ali.

The Cute Cat Theory shows that it is actually detrimental for a government to ban entire websites to curb dissent – especially social media. What’s better, because of this entire Dailymotion ban debacle, the number of people protesting against the Ben Ali regime on the streets shot up rapidly. If anything, the attempt to shut the digital vigilantes up ended up backfiring badly for the government.

India’s China Reset ≠ China’s India Reset

Global Times carried an op-ed on 12th April applauding India’s reported China Reset policy.

With regard to their ties in the past three years, many Indian media outlets and scholars believe New Delhi has gone astray with its China policy. Following a misjudgment of China’s development and the international landscape, the Indian government chose to confront China and consequently damaged India’s own development.

In typical Global Times style, the op-ed didn’t miss a chance to take a dig at India:

The rise of China actually constitutes an opportunity for India instead of posing a threat. China’s GDP is nearly five times that of India, so the two are at different levels of economic development. New Delhi can hardly expect to exert powerful leverage against China. The primary priority for India is mulling over how to take a ride on China’s development and realize its dream of national rejuvenation.

The bluster aside, what should be clear to us is that a China Reset in New Delhi does not imply an India Reset in Beijing. In fact, China’s recent foreign policy conduct shows that the reverse is likely to be true. With every Indian acquiescence to China’s aggression, China will escalate provocations.

Ask Philippines, Indonesia, and Vietnam, if you are still in doubt.

Welcome to Pragati Express

This is the most exciting day for me at Pragati since we relaunched the site over a year ago. Today we launch this group blog that you are now reading, called Pragati Express. It has an awesome team of writers, even if I say so myself. (Even if I wasn’t writing on it, and had nothing to do with it, I would want to read it every day.)

There are old-school bloggers like Nitin Pai, Yazad Jal and me. Pragati staff writers will also blog here, as will various policy experts from the Takshashila Institution. The list of writers that you see on the panel alongside will grow with time.

But first, let me address these question: Why a blog? Who reads blogs these days?

I was a prolific blogger with India Uncut back in the day, and wrote more than 8000 posts between 2004 and 2009, averaging five posts a day for quite a while. I slacked off after that, and now use it mainly to archive pieces of mine published elsewhere. I rationalised my laziness by arguing that the Age of Blogging was over: Social Media changed the way people navigate the web and consume content. Twitter and Facebook took over the filtering aspect. The personal posts went on FB and Instagram. Bloggers moved on; and so did blog readers.

So why Pragati Express?

Firstly, all the advantages that blogging held as a medium still hold true: I described some of them in this old essay. Blogging remains an easy and flexible way for anyone to get their thoughts down, unhindered by considerations of length or news cycles. They can go as broad or deep as they want, writing always in their own style, not the house style of someone else.

Secondly — and this is a reader’s point-of-view, not a writer’s — blogs don’t require writers to take hard positions on anything. When you write an opinion piece, for example, you usually plant a flag in the soil: this is my opinion, and I will stand by it. In a blog, on the other hand, you can express thoughts as they happen, and ask questions to others in public that you would usually ask yourself in private. I find that a fascinating process.

If journalism is the first draft of history, as the cliche goes, then a blog is the perfect place to take notes for that draft. And everyone can see those notes, and everyone can think aloud with you.

What kind of posts will you see here? Quick perspectives and insights on events as they happen. Questions that pop up in a writer’s head when they read something interesting in a book. An overheard soundbyte that sparks off a thought. And so on — there are few limits to this medium.

One aim we have for Pragati is that readers should feel smarter after they read an article there. Our aim for Pragati Express is that readers should feel stimulated by it.

It feels too meta to write any more about it right now. All I’ll say is, watch this space. We should have around four or five posts a day, starting today, from different writers with different interests and different voices. Do follow us on Twitter here, and like our Facebook page for updates. Happy reading!