According to Balaji Srinivasan, a former Coinbase CTO, India’s ban on Bitcoin and other cryptocurrencies could eventually cost the country trillions in potential profits.
The former CTO in an interview with The CapTable opined that banning Bitcoin is akin to banning the “financial internet.” Seeing that there is no way of blocking residents from accessing the internet or using virtual private networks (VPN), residents could easily turn to nearby Asian markets. Srinivasan said:
It’s really important that the ban (India’s plan to ban owning, trading, mining or investing in cryptocurrency) should not go through. It would be a trillion-dollar mistake for India, without exaggeration.
An anonymous official had earlier told media outlets that the Indian government would eventually ban all private cryptocurrency transactions in the country, with investors having a 3-6 month grace period to liquidate their assets.
Srinivasan who is now an entrepreneur and angel investor believes that India could end up 20% poorer over the next five years if it follows through with the ban. In his words:
India could get 20% poorer from what it could have achieved over the five-year term. It is almost like banning the internet for 5 years. The losses add up a lot [...] It would be a reversal of economic liberalization in many ways. It would basically be banning the financial internet from entering the country. And it wouldn’t even achieve the desired objective.