Why Govt.’s Might Kill Crypto If Bitcoin Becomes Successful?
The founder of Quantum Fund, Jim Rodgers, fears that the success of Bitcoin—and cryptocurrencies as viable alternatives to fiat, will force the hand of governments. In his assessment, if Bitcoin becomes mainstream, governments will have no option but to “kill” crypto and reinstate the much-needed control since they have the advantage as “gun bearers.”
Bitcoin Vs Fiat
Technically, fiat currencies are backed by nothing but the trust of the country’s treasury. Though backed by “thin air” and minted at will as dictated by the laid-down monetary policies, politicians all over the world yearn for total control of money.
On the other hand, the emergence of alternatives like Bitcoin and privacy coins as Monero means they challenge the establishment even if they are based on a digital, transparent ledger. Their transparency and pseudonymous nature may be a protective layer as the identities of participants are not overt.
In an interview with a Japanese news outlet, Jim said:
“If the cryptocurrency succeeds as real money, rather than the subject of gambling as it is today, the government will make the cryptocurrency illegal and eliminate it. The government wants to know everything. Controllable electronic money will survive, and virtual currencies beyond the influence of the government will be erased.”
The Clash Of Interests
However, the rise of monitoring and tracing firms like Chainalysis mean they are attractive for governments. With legal contracts with governments, these firms have over time refined their monitoring skills, recently updating the crypto community that transactions previously executed via some privacy coins were in fact traceable.
These are clashing interest but until then, Bitcoin is seen more as a speculative asset held primarily for gambling. As per the U.S. CFTC, Bitcoin is not legal tender but a commodity whose gains are taxable. China—which plans to roll out the Digital Yuan—has banned the trading of cryptocurrencies.
In general, crypto prices fluctuate depending on market forces. As such, unlike fiat currencies that are stable, BTC’s volatility, and a lack of a developed market could be a deterrent, preventing mainstream adoption.
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