These restrictions will be more common among developing countries. This is legitimate financial regulation and has nothing to do with bombastic statements by some media accusing the Indian govt of overreach
Most developing countries are at a high risk of capital flight by the rich and hence they regulate foreign exchange with Capital controls.
India already has a cap of USD 250k limit on capital flight by individuals.
Nowadays bitcoin is a common method to escape capital controls.
This law will prevent capital flight by the rich which they earned with the patronage of Indian citizens and escape reinvestment locally
The fact that it functions as an effective funnel for capital inflows is probably why the West keeps it legal.
If it was instead used to suck wealth out of the US it would be criminalized yesterday.
There was a mirrored double standard with tariffs. The US wanted them eliminated until China started reaching and surpassing technological parity at which point it couldn't put them up fast enough.
> suck wealth out of the US it would be criminalized yesterday.
until the USD is not the dominant reserve, USD themselves is considered wealth. You cannot suck wealth out of an infinite fountain.
So the time when the US gov't would institute such controls would be if China's dominance continues to grow, until chinese currency (whatever it may be - digital or fiat) is the new reserve. Because USD at that time would have become worthless.
I don't see the hypocrisy here? Were western countries ever against capital flight? This is more of a case of "x doesn't affect country, therefore it's not banned" which isn't really hypocrisy.
They actively use IMF as a tool and their own trade policies as avenues to force smaller countries to to remove or not implement capital controls although it's disadvantagious to those respective countries. US has policies in trade regulations that restricts/limits dollar clearing in countries that implement some capital restrictions. Ofcourse US has the right to their own trade policies but asking for countries to do this or that which are against their interests is called hypocrisy.
>but asking for countries to do this or that which are against their interests is called hypocrisy.
No it's not. The definition of "hypocrisy" from wiktionary:
> 1. The contrivance of a false appearance of virtue or goodness, while concealing real character or inclinations, especially with respect to religious and moral beliefs; hence in general sense, dissimulation, pretence, sham.
> 2. The claim or pretense of having beliefs, standards, qualities, behaviours, virtues, motivations, etc. which one does not really have. [from early 13th c.]
> 3. The practice of engaging in the same behaviour or activity for which one criticises another; moral self-contradiction whereby the behavior of one or more people belies their own claimed or implied possession of certain beliefs, standards or virtues.
hypocrisy requires some sort of contradiction between the actions of the entity, and the belief that it espouses. The US urging countries to have free trade, while also having free trade policies isn't hypocritical, even if free trade is against the other countries' interests. On the other hand, the US urging countries to have free trade, while simultaneously implementing anti-free trade policies themselves (eg. tariffs) would be hypocritical.
This law if intended for capital preservation is solely aimed at the middle class, the rich already have means of moving their money out. Panama papers and Swiss Bank fiascos proved that well.
India's iron handed squeeze of the middle class via insane policies is already causing a massive brain drain, the government seems either too stupid or willfully ignorant in recognizing the insidiousness of this issue.
It seems unlikely that talent is leaving because moving money out of the country is hard. Where would they move to? The simple explanation is income and quality of life is higher in richer countries. The vast majority of emigrants don't have entrepreneurial ambitions.
Bitcoin allows you to effectively arbitrage electricity price differences between the West and the developing world.
Which previously would require some kind of capital intense activity like Aluminium Smelting - which at least would promote development of local infrastructure, industrial capacity, and skills.
Bitcoin mining does none of that - local efforts to make electricity more affordable for local usage and business (ie. subsidies) are basically monetised.
In addition many countries like India have problems with illegal electricity usage. The shortage of GPUs and general computer chips (how much of TSMC output goes towards mining machines?) is also negatively impacting supply chains, particularly for countries at the very end of them.
Crypto mining is hugely disruptive and harmful to developing countries, and these bans are completely justified.
I understand that the US and other Western fiat currencies are being run into the ground to fund pension obligations - but you can just buy Apple or other blue-chip stocks if you want a long-term asset.
Additionally, in places where there's loads of green energy, crypto mining captures excess energy and discourages innovation in energy storage.
Rather than electricity prices being driven down by more green production and storage, there's this floor where it's better to just convert the energy into blockchain coin flips and heat.
> These restrictions will be more common among developing countries
If BTC ever becomes a threat, developed countries will not hesitate to make moves.
In 1934, the Gold Reserve Act prevented Americans from holding gold which was the global reserve currency at the time and universally considered hard money.
I have a feeling BTC will be a little easier to regulate.
> In 1934, the Gold Reserve Act prevented Americans from holding gold which was the global reserve currency at the time and universally considered hard money.
And to a very little success. People hoarding gold in US scored millions, at the expense of a average Joe gold buyer.
I believe the parallel is very relevant here. People buying bitcoin retail, and mining at gaming video cards are only a fodder for bigger fishes today.
I think its more likely to prevent capital flight by the middle classes than the rich. The rich always can and always will circumvent legislation anyway and dont need bitcoin
I really don't think these types of restrictions will succeed in western countries when you have people like Elon Musk and Jack Dorsey heavily involved.
If crypto only had the underground attention it had 5 years ago, maybe.
Capital controls are necessary to prevent complete failure of the financial system of developing countries due to hyperinflation where the rich can extract the maximum from the economy and runaway by investing in foreign economies. This is acceptable at a small scale but can cause serious issue if scaled up. The only countries that are safe from this are developed countries with reserved currencies like USD or are resource rich like Saudi Arabia
.
US doesn't need capital controls because their currency is treated as a reserve currency and the buffer to prevent hyperinflation is very high
Unfortunately most of the audience here has no experience with the situation you're correctly describing.
I find it both funny and a bit frustrating when people try to impose standards from wealthy developed countries on the developing world without further critical thought. Just because it's not a reasonable measure for your situation doesn't mean it's not a reasonable measure in a different one.
No. Audience here just skews heavily towards personal freedom of movement and that movement happens to include movement of money. Collective HN mind, if there is such a thing, abhors restrictions that it perceives could impact its freedom.
And frankly, personally, I do not really care what my ruling class thinks is best for me. I will figure it out on my own, thank you very much. I have seen the job done so far.
> Audience here just skews heavily towards personal freedom of movement
...and said audience coincidentally happens to mostly live in places that actually have that freedom of movement. On the other hand, I, my passport that can take me basically nowhere, and the awfulness of visa acquisition know very well that "freedom of movement" is already a joke. And I remain extremely sceptical of the opinions of people from countries that are not impacted by brain and capital drain (and which, in fact, benefit from it) on situations like this.
As someone who also lives in a country heavily affected by brain drain, I put in very high regard the freedoms enjoyed in those countries you choose to ignore, because it's the lack of them that causes the brain drain.
Skilled professionals and investors are reluctant to invest their time/money in a country that taxes the crap out of them without giving much back. Excessive protectionism and high costs of living punish the people that can move the country forward just to prevent stagnant industries from suffering an inevitable blow for a little longer.
“But if we remove the tourniquet the person will bleed out!”
....
Okay, you’re right. Perhaps we should ask instead, why do we need the tourniquet? What conditions were put in place that capital is attempting to leave?
Money goes where it’s safe and it can grow.
The Berlin Wall was the monetary equivalence of a capital control.
> “But if we remove the tourniquet the person will bleed out!”
This is an amazingly apt analogy, just not the one you think it is.
Sure, you can debate about how the person should/would never have been injured in the first place if everybody involved in the situation did everything right. But they are injured, right now, and they will die, right now, if they're not provided with first aid and further medical attention - and until the patient is stabilised, those lofty questions are useless pontifications.
Except it's not just one person at risk. It's millions and millions of people and their livelihood.
Leave a tourniquet on for far too long and you risk losing a limb. And a limbless person will have a much lower quality of life. Likewise with capital controls, it might serve to treat the problem now but it does nothing to tackle the causes and all you're doing in the end is consolidating power for an authoritarian government and crippling your economy for decades to come.
As I have already mentioned, a person that's bleeding out requires first aid [now] - which the use of a tourniquet is a part of - and further medical attention.
Emphasis on the further medical attention, because they will simply never be able to get it if first aid is not applied. This is the exact reason why first aid exists, even though it is often technically destructive (e.g. properly administering CPR runs quite a high risk of breaking the patient's ribs).
> And a limbless person will have a much lower quality of life
A person who has lost a limb is alive, and (I digress) the hand-wringing that abled people do over the quality of life of the disabled is a bit weird.
"I'm nowhere near a hospital yet but this tourniquet has been on for ages so let me take it off and continue freely bleeding out" is frankly a foolish decision for anybody to make.
Capital controls merely treat a symptom (flight of capital) instead of treating the disease (a faltering economy) and left on for any period of time only leads to further consolidation of power to the ruling class, at the expense of the rest of the populace.
But then how do we fund all these populist measures in our LARPing as a first world country making lavish expenditures to improve QoL? Do you hate people who can't afford XYZ?
This.
Anyone arguing for globalization should support free movement of goods, services and PEOPLE. Otherwise, one is just attempting to distort the system to their advantage.
Unless you are for free movement of people as well, you can't honestly argue for application of monetary policies of the developed economies to the developing economies.
> * To prevent a global race to the bottom on wages and working conditions.
This is pretty much like saying that abolishing the privileges of aristocracy and clergy would have reduced everybody status. It was only true from the point of view of someone holding a title.
Our current Western wealth and working condition are the result of centuries of colonialism and exploitation for the rest of the world which continues to this day. The only reason you could technically afford to buy clothing wear them once and then discard them is because they are effectively produced by slave labor somewhere out of sight.
The remnants of colonialism are still there in the form of the WTO, World Bank and IMF.
If capital controls benefitted ex colonies the IMF wouldn't threaten to withhold western investment from democratically elected governments if they didn't eliminate them.
>>Most developing countries are at a high risk of capital flight by the rich and hence they regulate foreign exchange with Capital controls. India already has a cap of USD 250k limit on capital flight by individuals.
Anybody who owns a legitimate business in India has no reason to do this.
The only people in India who could do this are bribe makers, and the ecosystem around that. And those people already have means to not just park that money some where(many times outside India), but also whiten it at will.
The bribe makers already park money in gold, lands(in the names of relatives). In cities lots of Ola/Uber cars are owned by bribe makers and then they get some one from native places and get them to drive it for a share in profit. You will be surprised how that money is invested. Building a hospital/hotel? Put a word out, people invest in as little as a hotel/hospital room in return for some rent. There are even stories of people buying Green Cards for their siblings, relatives etc.
This is illegal collection. The legalised corruption goes really really deep. There's reason most government housing colony plots are generally owned by people who are in civil services or in some way connected to them.
Coming to capital flight. There was recently a number of ponzi schemes in Bangalore, in the name of Islamic Sharia investments. A number of firms came down, and investor money in literally thousands of crores was laundered. A famous one was called the 'IMA Scam'. The owner has luxury palaces in UAE, and apparently has gold in underground warehouse vaults outside India. He was arrested but is out on bail for medical reasons :)
When people say there is some $250K limit on these things I burst out of laughter. $250k, which around 2 crores is likely a single day bribe collection of a sub registrar office in anywhere in Bangalore.
>>This law will prevent capital flight by the rich which they earned with the patronage of Indian citizens and escape reinvestment locally
'The Rich' don't even get their money to India. The big businesses, including the big IT services firms, only get as much money to India as much as they need to run operations here. This is why every time the dollar gets stronger IT services firms get richer. So do the investors. Most of the business is run on rented campuses, and apart from the core businesses you contract most of your work to local companies. So it's not like the big businesses hoard a lot of money in INR.
Nobody is actually that stupid to legally bring their billions into a country from which they can only take $250K back.
Lastly the only reason I see, and I don't think its malice. But I think it's 'new tech phobia'. The established order of society doesn't like disruptive stuff. That's pretty much it. In 1980s there was once a Bharat Bandh called in India when Rajiv Gandhi introduced computers.
>Anybody who owns a legitimate business in India has no reason to do this.
Really? So none of the rich folks in India send their kids to college in the US or Europe? None of them own homes or boats or cars in those countries? They have no reason AT ALL to extract capital from India besides bribes?
While I won't even begin to try to claim India doesn't have a ton of issues socially, trying to claim anyone moving capital elsewhere made the money illegally seems like more than a bit of a stretch.
But your comment made no mention of scale. You said anyone moving money was participating in illegal activities. Now you're just trying to move the goal posts.
If you're going to make definitive statements like:
>Anybody who owns a legitimate business in India has no reason to do this.
>The only people in India who could do this are bribe makers, and the ecosystem around that
Then you better be prepared to back them up or apologize for making broad statements that you have no intention of standing behind.
these kind of government overreach is one of the reasons why capital(regardless of its size) has an insensitive to leave those countries, it's just that expenses to leave are more or less fixed, so its easier for rich people to afford it
I recall back in the 90s there was a huge influx of "Indian" gold into the "West". It was identifiable from it's high purity and almost orange color, it was being carried out as jewelry and converted into real estate for the most part.
My point being, as long as there is a will to move wealth, the holders will find a way around any restrictions imposed by the state and infact restrictions usually create whole industries based on Enforcement of, and Evasion of state imposed restrictions.
This bill seems to be drafted on the lines of GDPR but exempts govt. entities.
Strong regulation on social media:
(Page 41): the Central govt may notify “social media intermediary “whose actions have significant impact on electoral democracy, security of the State, public order or the sovereignty and integrity of India” as a significant data fiduciary.
Data fiduciaries will need to verify a child age & obtain consent of their guardian. Data Protection Authority can classify some as "guardian data fiduciaries" if they target children or process large amount of children’s personal data.
The bill has expanded right to correction to include right to erasure, once the data is no longer necessary for the purpose for which it was processed.
Ubuntu actually only keeps the current and the previous kernel as necessary and give the user the option to purge all the old kernels. These old kernels will be marked as autoremovable and by setting a flag in unattended upgrades config you can make it autoremove those. On desktops this happens automatically.
Apparmor certainly has it. It also pretty easy in apparmor if the rules you want to set are permanent but I don't know if a dynamic api exists for apparmor.
Most developing countries are at a high risk of capital flight by the rich and hence they regulate foreign exchange with Capital controls. India already has a cap of USD 250k limit on capital flight by individuals.
Nowadays bitcoin is a common method to escape capital controls.
This law will prevent capital flight by the rich which they earned with the patronage of Indian citizens and escape reinvestment locally