Archive for February 2nd, 2017

Indian central bank cautions users of virtual currency..a monopoly worried?

February 2, 2017

It is all so ironical isn’t it?

On one hand the Indian central bank is pushing digital payments like never before:

Further, banks are urged to encourage their constituents to sustain the movement towards digitisation of payments and switching over of payments from cash mode to non-cash mode.

On the other it is asking to stop using virtual currencies. In a press release yesterday it said:

The Reserve Bank of India had cautioned the users, holders and traders of Virtual Currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to, vide its press release dated December 24, 2013.

The Reserve Bank of India advises that it has not given any licence / authorisation to any entity / company to operate such schemes or deal with Bitcoin or any virtual currency. As such, any user, holder, investor, trader, etc. dealing with Virtual Currencies will be doing so at their own risk.

Infact, it is the Indian central bank itself which has given rise to increase in these VCs. Any threat to people’s money leads them to search for alternatives and VC has emerged as one such alternative. The Cyprus crisis showed this as well.

 

The central bank had warned against using these virtual currencies earlier in 2013 as well but that time things were different. It was not pushing digital payments. The war on cash had not begun and there was little idea on what was about to happen in few years.

In 2013, RBI’s notice has more explanations against VCs:

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How the 19th-century rebuilding of Britain’s Parliament House made air pollution visible and controllable..

February 2, 2017

There is just so much to figure.

Timothy Hyde  Professor of Architecture at MIT has a piece on the topic. He shows how reconstruction of British Parliament house raised awareness about the presence of air pollution in London. This rising awareness eventually made authorities take action to curb the same:

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Are India’s fund managers less savvy about political economy?

February 2, 2017

Debashis Basu of Moneylife is one of the few go to people on matters of economic and financial journalism . His earlier piece on payment banks when they were licenced was ahead of times as he was one of the few who dissented against their business model. We only saw later how as right of the licencees dropped from the race and just have started operations from remaining eight.

In this new hard hitting piece , he questions ignorance of India’s fund managers.

He says and rightly so that despite so called 25 years of liberalisation the fund managers continue to believe in big government, big and bold budgets/policy and so on. Whereas it should just be the opposite.

He keeps the discussion limited to fund managers but applies to so many others – economists, media, bankers, top businesses etc. They all talk and write in the same tone. It is unbelievable how even the private bankers respond so similarly to any policy.  Just look at the papers today. Same old story.

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Ever wondered why the government is so powerful? It is due to their monopoly over currency..

February 2, 2017

Prabhat Singh explains how governments derive so much power due to their control over currency . He explains this uniquely via a question and answer session between two friends.

Superb bit. Couldn’t be a better way. It is a pity that even most economists do not get these basic ideas..

 


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