I’ve been thinking about India’s will-they-won’t-they reckoning with the legality of cryptocurrency. Even a year after the Supreme Court ordered the RBI to rescind its ban on banks dealing with cryptocurrency-linked exchanges and directing the government to formulate a law instead, there isn’t one. Instead, there’s a bill that has wound its way through committee and is now awaiting tabling in the ongoing session of Parliament.
The one-line description of the bill makes a reference to the banning of “private cryptocurrencies”. As a consequence, the sword of damocles that has hung above India’s collective cryptocurrency ecosystem since the RBI ban in 2018 has gotten a little wobblier. Every week, for weeks, people in the ecosystem have parsed the odd statement by the minister of finance, and the governor of the RBI and other bureaucrats to glean some indication of which way the wind is blowing.
One day – no one knows when – everyone’ll refresh their feed and discover whether India’s entire industry lives free or dies or is condemned to a highly circumscribed life. That decision determines the access of one-sixth of humanity to something as transformative as decentralised ledger technology – someone in the industry draws comparisons with India’s mid-1990s decision to allow (extremely constrained) access to the Internet itself.
This is a terrible way to live.
Finally, what’s worse is that it’ll eventually be one person – whether an influential bureaucrat or an elected official – who’ll make the difference.
This isn’t unique to India. While in India the eventual lynchpin might be faceless, policy making in the US is transparently but routinely held hostage to a small handful of elected officials.
These are single points of failure. Failures of imagination. Failures that can and often do set entire populations and economies back by a generation.
Corporations make similar decisions at different levels in their hierarchy. The difference for people like you and me is one of choice. We can usually switch to another product, another provider, another subscription. There are switching costs, of course. But the costs of switching countries are many orders of magnitude higher.
Finally, corporations reverse decisions quickly as well. The feedback mechanism is tighter. Decision making is more agile than countries to begin with. It’s a lot harder to rescind an executive order and reverse a law: citizens have only the judiciary and the ballot box.
In the coming face-off between corporation-states and nation-states, this agility will be a big competitive advantage.