Bitcoin is a type of digital asset or currency that can be transferred from one bank account to another quickly. And, due to being curated on decentralized technology, it doesn’t require any middleman to oversee the whole thing. It’s automatic and self-sufficient.
However, still, many governments don’t like the usage of Bitcoin. For example, nations like Bolivia, Vietnam, and Algeria have already banned the usage of BTC.
Even an economically-advanced country like China has stopped the usage of Crypto as well. But, why? What’s the problem with using Bitcoin for making a transaction or two?
Let’s find out.
Why Doesn’t The Government Like Bitcoin?
Bitcoin has grown like a wildfire since the last decade. And, as per a report, it can massively upgrade the financial system of a nation. Then, why are people so hellbent on banning it?
Let us tell you why.
Reason – 1: Complete Loss Of Control
A national government has the power to control a fiat or traditional currency. Thus, if needed, they can change the monetary policy in any way they want. Besides, it also helps them track how and where the money is being transferred.
But, as Bitcoin derives from a decentralized environment, it cannot be controlled by anyone. Thus, even if someone is using it to ensue a fraudulent activity, the government won’t be able to know anything about it. It, in turn, might affect the country’s stability negatively.
Reason – 2: The Sense Of Uncertainty
Even though it’s been a decade since BTC first came out, it still is in its infancy. After all, it’s yet to be used as a traditional form of payment in the mainstream market.
So, the uncertainty of its future is still there.
Apart from this, the volatility of the market can be too much to handle sometimes. Therefore, if a nation entirely depends on Bitcoin, its financial stability will naturally be affected.
Also, the blockchain environment isn’t as secure as it was used to be before. The concern of hacking is there if you’re not using a secure platform like bitcoin up. So, that’s another issue.
Reason – 3: Complicated Financial Treatment
The financial treatment of Bitcoin is quite complicated, especially due to the implementation of the blockchain technology. It’s pseudonymous and impossible to track by anyone.
Due to this reason, it becomes impossible for the government to put a proper taxation policy on it. The monetary policies have to be created a little differently as well.
Hence, the whole thing can become a mess if the government doesn’t make proper financial treatment. And, that’s why they consider Bitcoin to be a nuisance to their planning.
Reason – 4: A Threat To The Growth Of Central Banking
The government of a nation controls the financial ecosystem of a country through the central banks. Hence, their sole focus will be on making them grow even more.
However, Bitcoin can prevent that from happening.
If BTC becomes mainstream somehow, people will start using it more than fiat currency. So, the value of the same will decrease massively. It, in turn, can affect central banking too.
Reason – 5: Crime-Related Concerns
Due to anonymity and decentralization, more and more crime authorities are using BTC as a payment method for illegal activities. And, this will increase even more with time.
Also, Bitcoin is also being used to purchase illegal weapons in many countries. Hence, if the government doesn’t get a hold on this, a huge calamity might ensue.
Bitcoin, as a form of Cryptocurrency, definitely has the potential to improve the fiscal system of a country massively. Nonetheless, it still comes with a few flaws that might unbalance the whole economic infrastructure of a country. Hence, from the viewpoint of the government, it does seem alright to ban any form of Cryptocurrency available out there.
However, if you still haven’t bought or used Bitcoin but are planning to do so, don’t forget to check the financial policy of your country beforehand. Or else, you might get arrested for it.
In any case, that’ll be all for this blog. If you want to know something else or have a question for us, please comment below. We’ll try to answer you at the earliest.