Is RBI worried about Rupee collapse?
That is the only logical explanation to ban Bitcoin
RBI has placed a bill in parliament that wants to ban possession of private cryptocurrencies like Bitcoin and Ethereum.
Last time around, they passed a circular asking banks to stop serving clients investing in Bitcoin. This was struck down by the supreme court, calling it unconstitutional.
RBI now wants to bring about a law being passed in parliament, to get possession of Bitcoin illegal. They say investing in Bitcoin has a huge risk for customers as there are a lot of hacks, etc.
Now, one would wonder why govt allows in investing in 10,000 odd penny stocks in the Indian stock market which are far riskier than Bitcoin?
Every day there are numerous stories about people losing money through credit cards/debit cards, yet RBI is constantly promoting digital banking.
If RBI was indeed worried about consumer protection and hacking risks, they could create strong custody solutions for Bitcoin like in the USA / Europe, but they haven’t.
In fact, in the last 4 years of RBI being aware of Bitcoin, they haven’t passed a single regulation or law for consumer protection.
This clearly shows that they don’t care about consumer protection but have an ulterior motive.
Now, why is RBI so worried about Bitcoin and other cryptocurrencies, and why do they want govt to ban Bitcoin?
Not to mention banning Bitcoin is simply practically impossible and 100% unconstitutional and will be stopped by the supreme court, still, they do not want to give up easily.
Read this to understand fully why banning bitcoin is impossible and illegal or click this https://bit.ly/3j11Cb1
What is Bitcoin, how it works?
The simplest way to understand Bitcoin is this:
Bitcoin is just like a typical bank account, your bitcoin account can be accessed by a login and password (in the case of bitcoin there will a long 72 letter password that you need to store safely), however unlike traditional bank accounts, which are controlled by your bank and your govt, Bitcoin is not controlled by anyone nor can anyone STOP it.
Bitcoin is run by a swarm of computer servers as it’s decentralized i.e., no single party controls it, and it’s run by 1000s of servers run by a software called the blockchain.
Now the beauty of Bitcoin is, there is very limited issuance of the Bitcoin currency just like Gold or precious art, so for this reason, the RICH have been going gaga about Bitcoin and pushing its price to new heights every year.
click this to learn , why are the RICH going gaga about BITCOIN ??
As you can see, the price of Bitcoin is constantly going up. You must have listened to many stories of people investing in Bitcoin and people making a lot more money than in the stock market, etc.
The three main reasons are this
Bitcoin has extremely scarce issuance compared to STOCKS, CURRENCIES or Bonds, REAL Estate, or even GOLD. So by simply holding BITCOIN, you will be making more money than any other asset. Apart from this, Bitcoin offers a unique property that other assets don’t offer.
Bitcoin exists only online as a digital bank account and is not controlled by any bank, for this reason, anyone in any country can invest in Bitcoin.
People in countries with hyper-inflation like Venezuela, Nigeria especially LOVE Bitcoin (their govts obviously don’t like Bitcoin, no govt does).
People in rich countries like the USA/Europe love bitcoin as they can preserve their wealth for a generation without fear of confiscation, for this reason, Bitcoin is often called Digital GOLD.
What is the real reason why RBI is so scared of Bitcoin?
You see, all the governments in the world run budget deficits, and they borrow money from central banks to fill the gap. Central banks fill this by printing money.
Money printing by central banks is what creates inflation, that is the real reason why prices constantly keep growing
Ever since all countries got off the gold standard, this is what has been happening, and govt deficits and debt have been growing larger and larger and, as a result, currency circulation has been growing larger and larger as central banks print more and more currency.
As explained before, when currency circulation grows, it creates more inflation, i.e., everything starting from your Coffee and breakfast and your HOUSE price keep growing up.
So what, HOUSE Prices going up, so that’s a good thing, right?
Unfortunately no, when the price of your HOUSE goes up, everything else goes up too, so you are not getting richer in real terms. However, should you decide to sell your House, the tax you have pay is much higher coz tax slabs are changed only every 10–15 years and that too very slowly.
This is the reason why Govts love inflation, they love collecting more and more tax dollars.
Govts and banks have created a massive Real estate bubble for this reason, so they can not only benefit from printing more money and spending it but also earn more taxes when you sell your house.
( read up https://thetrurthseeker.medium.com/how-govts-across-the-world-create-the-biggest-real-estate-bubble-in-history-455a2c2efebe )
Bitcoin — The NEW WORLD order
Now, as you can expect, inflation also causes a rise in the prices of Bitcoin, but here’s the real kicker.
Unlike Bitcoin, more houses can be easily built, in fact, house building costs less and less as technology improves, so building more costs less and less.
But unlike houses, MORE BITCOIN cannot be created no matter how much we try as its SUPPLY is restricted by SOFTWARE and MATHS.
So what happens when a constantly inflating supply of currency (like all FIAT currencies) meets a scarce asset like Bitcoin, year on year, the price of Bitcoin keeps going up, and it’s really unstoppable, coz again, Bitcoin has limited supply, unlike Houses/Stocks.
If the price rise of Bitcoin continues, more and more people will be attracted into investing into Bitcoin as more and more people invest into Bitcoin, the price keeps going up more, and the cycle continues.
This is the exact reason why RBI is scared of Bitcoin
a) Bitcoin is not controlled by them.
b) new Bitcoin supply is very low.
If the whole world realizes this and starts buying into Bitcoin, every other asset like REAL estate / STOCKs will start imploding.
If prices of HOUSING starts going down, everyone will start selling their houses too. This will create further panic and push the prices of houses lower and the prices of Bitcoin Higher.
Now, why can’t govt simply print more money, so the prices of houses keep going higher?
In theory, yes, if govts print more money, the house prices will keep going up, but so will the price of Bitcoin, in fact, the price of Bitcoin goes up much much higher than the price of Houses, coz the supply of Housing is not limited, and real estate developers are constantly building more and more houses.
( Apart from this, With near-universal Internet access and ‘CORONA EFFECT,’ more and more people will shelve their plans to buy real estate in expensive cities and are simply opting to rent out).
Can’t govt simply not shut down Bitcoin Network?
No, they can’t, you see, Bitcoin runs on a decentralized network of 1000s of servers that run in multiple places across the world. If govt needs to shut down Bitcoin, they need to shut down all the servers at once in different places. This is simply impractical and impossible to stop.
Not to mention, illegal, unconstitutional, and again “Practically Impossible.”
So what, What’s the issue RBI has if Bitcoin keeps growing higher and higher?
The issue is this, if the whole country starts investing in Bitcoin instead of investing In Real estate ( and simply rents out ), GOVT loses a lot of TAX Revenue.
- Govt makes a lot of tax money when you buy a house ( in fact the highest of all investments compared to Stocks etc., and that’s why they promote real estate heavily).
- Govt also makes taxes on your Rental income every month/ year.
- Unlike every other investment you make, capital gains on real-estate are simply unavoidable.
In fact, in many countries, capital gains tax makes up 20–30% of a nation’s income, including India.
Now how do you think a govt can fill this tax shortfall?
Govt’s simply can’t raise taxes like income taxes or like GST / VAT coz the rising them affects the Economy and slows down the economic activity and reduces the govt’s ability to collect more taxes.
So, the only way governments can fill up the budget deficit is by simply printing more money, like they always do.
However, as explained before, printing more money creates inflation and pushes up the price of Bitcoin a lot more than real-estate or stocks (which don’t have a supply limit like Bitcoin).
If the price of Bitcoins keeps going up, more and more people will stop buying real estate/stocks and buy more Bitcoin instead, which further reduces the tax revenues for Govt.
THIS IS EXACTLY WHY NO GOVT LIKES BITCOIN
Why is RBI especially worried about Bitcoin and the fall of the rupee so much?
India is especially in a bad situation compared to the rest of the world
you see, India has the highest NPAs in the world
India has the second worst NPA ratio among large economies
New Delhi: The International Monetary Fund (IMF)'s new data doesn't show Indian banking in the best light, or company…
For the last 50 years, bad banks have been simply rescued by Govt by printing new money without any worry.
With the advent of Bitcoin and decentralized scarce money, Govt’s can no longer print money like there’s no tomorrow.