For those old enough to remember, India pre-1990, was ruled with more of a Socialist, Planned economy mindset. Everything, from the types of commodities to produce, to export, in what quantity and by which manufacturer was tightly regulated by the Indian government under a system of what we not-so-fondly called the License Raj.
License Raj
As any economist worth their salt will tell you, intentions do not matter, or the more pessimistic refrain 'The road to hell is paved with good intentions' comes to mind. Instead of having the effect of allowing a resource starved India to prudently allocate her resources and plan growth in a socially just way (whatever that means), it had the opposite effect.
It bestowed large windfalls on businessmen that had the good fortune of being connected to the right people in government and were able to buy their way into the needed manufacturing licenses for their chosen good. It tied the hands of entrepreneurs who had the capacity for much more than their license quota allowed them. The importance of capital formation and the ability to stop thinking from a scarcity mindset were lacking at the time.
While this was unfortunate, the objective of this article is not to criticize those old failed policies. After all, it's quite difficult for us to put ourselves in the shoes of a policy maker in newly independent India, and see what they saw and had to grapple with. Economic science was not quite settled back then either and it was quite natural that we were influenced in this direction by our greatest ally and friend at the time, the Soviet Union.
On a positive note, India post-1990 has really gone from strength to strength and proven what a bit of free markets and moving generally in the right direction can do to lift millions of people out of poverty.
Crypto crossroads
We find ourselves at a similar crossroads again and have the opportunity to choose our economic path for the next few decades, as a reset in the global monetary system unfolds. This time however, with the benefit of settled economic theory (it's quite clear that Free markets won) and a much stronger, prosperous and confident India. Again, we have Indian entrepreneurs that are yearning for free operating room to build their businesses.
We potentially have trillions of dollars of wealth and millions of jobs waiting to be unlocked over the next several years. I am of course referring to the Crypto revolution, which has every chance of being as large as the Software sector for India.
It will afford the early mover (from a nation state standpoint) a disproportionately large windfall and head start over other nations. Countries like Japan, Switzerland and South Korea are taking the lead and moving headlong into Crypto. Europe is being left behind, although there are pockets of Innovation.
The United States is in limbo, being an innovator, but also the one most likely to be disrupted if the Dollar were to lose its reserve currency status. Even China has taken a decidedly positive stance towards Blockchain, if not Bitcoin (that there is not one without the other is a topic for another discussion).
The United States and Europe have an incumbent status to protect, with the Dollar, and to a lesser extent the Euro. China is trying to remain closed off and play the Blockchain, not Bitcoin game. This really is a golden opportunity for Indian to step up and disrupt.
This will require a change in the mindset of the people from looking to the government to solve their problems or run their lives, and a change in the mindset of our regulators from seeing themselves as rulers instead of elected representatives serving us. It will also require some foresight and confidence that India can lead, instead of being a follower.
On a personal note
I got into Crypto for more individualistic reasons. I'm a firm believer that people should take control of their destinies and live their lives the way they want to, without being treated as statistics or experiments by policy makers interested in Financial and Social engineering e.g. "let's kick up inflation to change consumer behavior", "let's lower interest rates and punish savers to bail out debtors". I was not interested in being a part of a system where you are manipulated in various ways to fulfill some ends that you are not even part of, or aware of.
I think this need for self-determination holds true for the Nation State as well. Why does one get to be a part of the Financial elite vs in the Global south, for reasons that have nothing to do with their abilities? Why do some have opportunities, not afforded to others? Why are there rentiers who extract value while adding none. Why do rising interest rates in the US mean, possibly a falling Stock market in India? Why does currency manipulation by export-oriented countries, mean the gutting of the manufacturing base in others.
If our leaders were more honest, they would say that yes the current system is broken and needs to be overhauled. Just as Cryptocurrency has the ability to level the playing field between Individuals, it has the ability to do the same at the Country level, allow them to deal with others on their own terms, and follow policies that are best for them
The current state of affairs: Much to be improved
Instead, the regulatory uncertainty in India has left the Indian entrepreneur waiting to see how the government decides to treat and regulate Crypto, while International players like Binance and LocalBitcoins are eating up large portions of the Indian markets, being domiciled elsewhere and not having to comply with Indian regulations.
We, the local entrepreneurs, with our hands tied behind our backs are watching our Domestic billion-plus people market taken away by foreign entities. The positive alternative is for the Government to untie our hands and for us to build enterprises with a massive domestic market and use that as a base to assault foreign markets, such as those in Africa and other Asian countries.
This will require yet another mindset change for the people to understand that it's OK to have a few home-grown large enterprises. Big local companies and large profits are not a bad thing. It may be the only thing allowing us to compete with the behemoths that are trying to enter our markets without any restraints having been put on them.
Let's at least make this a fair fight, by establishing clear rules and guidelines. There really is nothing worse than regulatory uncertainty in this situation.
CEO / Founder, Indra Crypto Capital
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Yes, India has changed a lot since the 1990s and I would say that India still needs more freedom and decentralization regarding governance
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