As the Indian government prepares to introduce laws regulating cryptocurrencies, the country’s Prime Minister Narendra Modi warned on Thursday that Bitcoin poses a risk to younger generations, sounding in an aggressive tone.
In a speech to an online cybersecurity forum, Modi identified virtual money – which is hugely popular in India and outside the control of the state and central bank – as a domain that needs close scrutiny.
“Take cryptocurrency or Bitcoin, for example,” he told a forum at the Australian Strategic Policy Institute. “It is important that all democratic nations work together to ensure that it does not fall into the wrong hands that can spoil our youth.”
Critics of cryptocurrencies claim that largely anonymous unregulated remittances make them a perfect tool for drug traffickers, people smugglers, or money laundering.
Several countries have begun enacting laws to introduce oversight over cryptocurrencies, and exchanges in many jurisdictions are now subject to the same regulations as other financial services providers.
India effectively banned cryptocurrency transactions in 2018 only for the country’s highest court to lift the ban two years later.
This sparked a boom in the industry when the country’s large young population became aware of a commercial flash from Bollywood and cricket stars.
There are increasing calls for a further ban on India, but Modi’s government seems willing to stop, preferring instead tough laws that could be passed before the end of the year.
The head of the Reserve Bank of India, Shaktikanta Das, was harsh, saying last week that cryptocurrencies pose a serious threat to the financial system if not properly regulated.
At the same time, the central bank is considering issuing its own official digital currency.
In a broader sense, Modi used his address to promote India as a global technology center. Its “Digital India” program aims to modernize and use technology on the subcontinent of 1.3 billion people.
Modi said new technologies like quantum computers offer great opportunities.
But it is “essential for democracies to work together”, “to invest together in research and development in future technologies”.
He added that there is also a need for democracies to “deepen intelligence and operational cooperation on cybersecurity.”
Critics have accused Modi – chosen on an often divisive Hindu nationalist platform – of using technology to silence opponents.
“The Modi government has used technology since it came to power in 2014 to curtail rights in an escalating crackdown on freedom of expression, association and assembly at home,” said Elaine Pearson, director of Human Rights Watch Australia.
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