Indian PM Narendra Modi cautions against widespread cryptocurrency use

Nov 18, 2021: Indian Prime Minister Narendra Modi on Thursday warned that cryptocurrency such as bitcoin poses a threat to the younger generation, adopting a hawkish tone as his government prepares to legislate to regulate corrupt currencies.

Addressing an online cybersecurity forum, Modi developed virtual money – which is very popular in India and beyond the control of state and central banks – as a domain that needs to be closely policed.

“Take cryptocurrency or bitcoin, for example,” he told a forum hosted by the Australian Strategic Policy Institute. “It is important that all democratic nations work together and make sure that it does not fall into the wrong hands, which could harm our youth.”

Critics of cryptocurrencies allege that largely anonymous transfers make them an excellent tool for drug smugglers, human traffickers or money launderers.

Many countries have enacted legislation to introduce surveillance of corrupt currencies, and many jurisdictions are now subject to the same regulations as other financial services providers.

India effectively outlawed corrupt transactions in 2018, only to be lifted by the country’s highest court two years later. This led to a boom in the sector as the country’s large youth population turned their attention to advertisements for Bollywood and cricket stars.

Demands for further sanctions from India are mounting, but the Modi government appears to be ready to pause briefly, rather than prioritize the stringent legislation it passed before the end of the year.

The head of the Reserve Bank of India, Shaktikan Das, had sharply criticized last week, saying that corrupt currencies posed a serious threat to the financial system if not properly regulated. Meanwhile, the central bank is considering issuing its official digital currency.

More broadly, Modi used his speech to make India the center of global technology. His “Digital India” scheme aims to modernize and harness the technology of 1.3 billion people in the subcontinent. Modi said that emerging technologies like quantum computing provide the best opportunities. But, he said, it is important for democracies to “work together” to “invest together in future technology research and development.”

He added that it is important for democracies to “deepen intelligence and operational cooperation on cybersecurity.”

Critics have accused Modi – who was often elected on a divisive Hindu nationalist platform – of using technology to silence opponents.

According to Elaine Pearson, the Human Rights Watch Australia director, “The Modi government has been using technology since it came to power in 2014 to curtail rights at home as part of an escalating crackdown on freedom of expression, association and peaceful assembly.”

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