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American billionaire calls Modi government “pathetic and corrupt” over its bitcoin stance

By Ananya Bhattacharya

India’s tough stance on cryptocurrencies has irked the American billionaire and venture capitalist Tim Draper.

On July 17, Draper, best known for his investments in companies such as Baidu, Hotmail, Skype, and Tesla, lashed out on India’s Narendra Modi government calling it “pathetic and corrupt” for its disapproval of bitcoin.

Draper’s reaction came after blockchain lawyer Varun Sethi circulated the supposed draft for banning cryptocurrencies that proposes a 10-year prison term for those who “mine, generate, hold, sell, transfer, dispose, issue or deal in cryptocurrencies.”

The document makes one exception for this rule, which is the “digital rupee,” a sovereign token issued and backed by India’s central bank, the Reserve Bank of India (RBI), for local transactions.

Currently, there is no official ban on cryptocurrencies in India, but the RBI has choked the burgeoning ecosystem by barring all dealings. Already, a bunch of exchanges like Koinex and Coinome has been forced to shut shop.

Overreacting?

Several experts believe that in developing countries, virtual money can give people an alternative to local currencies and the dollar to store wealth and invest.

So, Draper, who recently advocated bitcoin to the government of Argentina, is certainly not alone in his dislike for India’s strict regulation.

Barry Silbert, venture capitalist and founder-CEO of Digital Currency Group (DGC), took to Twitter on June 7 to say such moves will “have the opposite of the desired effect on bitcoin awareness and interest in the country.”

Computer scientist and crypto advocate John McAfee has said banning bitcoin is futile. “Banning the invisible, used by the anonymous. Wake up world! Crypto is the mythical Pandora’s box come to life,” he wrote on July 16.

Meanwhile, Draper is fighting a strong backlash from Indians on Twitter.

The backlash

In India, Draper is best known for his Silicon Valley entrepreneurship college, the Draper University, which has incubated several Indian entrepreneurs in recent years. Two years ago, Draper Ventures partnered with Blume Ventures to fund Indian startups.

Though these programmes have been lauded, his criticism to a possible bitcoin ban wasn’t well-received in the country.

There was pushback from some Indians on the microblogging site, who said Draper was acting in self-interest and supported the Indian government’s views owing to the volatile nature of the currency.

Others stressed that the outsize reaction is unwarranted since this is just a draft bill and may never even see the light of day.