Reverse Psychology- Banning Bitcoins Will Only attract More Interest In It.

We did read and hear about the Indian Central Banks(RBI) plan, to stop all transactions from its affiliated institutions(Banks) to any Individual or business entity(Exchanges) dealing with any virtual currency. This means that all Indian crypto-enthusiasts will find it tough to transfer money to their exchanges. Eventually the exchanges might become starved of funds and unable to provide the required services. This chaos will lead to closure of exchanges.

What the RBI fails to understand is that it cannot BAN OR BLOCK the interest people have in Bitcoins. By blocking and making it tough to obtain the RBI is building more desire in people to obtain it.

Their is a Marketing Term called Paradoxical Marketing. It implies that the simple selling point of an object can be its less availability. People simply want something that is rare and not held by everyone. This psychology is present in every human. And it is this psychology that gives Gold or Diamond its value. Thus in my opinion the RBI in an attempt to curb virtual currencies will end up marketing it more.

Sooner or later people will come out with innovative ways to buy and sell bitcoins bypassing the banking system. We just need to have patience and take the backseat till this Crypto-Demonetisation dust settles.

A more important news for me is that RBI is itself planing to create its Virtual Currency. A committee is already looking into the aspects and its report is expected by July 2018. What I am unable to understand is

• What use will such a Virtual Currency have ??

• Could it be that RBI's Virtual Currency will be made mandatory for all Cryto-Currency Transactions so that the RBI has an eye and say in how much foreign exchange is being transferred via them ??