Bitcoin is a digital currency that can easily be transferred from one account to another without a middleman. This means that bitcoins can be sent to anyone without the need for a central bank, financial institution or Government. Many people accept it as a viable and reliable financial system.
Why the Government Doesn’t Like Bitcoin
Many countries have banned bitcoin because they fear it could be used to commit fraud and criminal purposes. Some countries fear that bitcoin could be a threat to national sovereignty. Let’s now look at five main reasons some governments don’t like bitcoin.
Loss Of Control Due To Decentralization
The Government has the power to regulate traditional currencies like Yuan, Euros and Dollars. They can alter the monetary policy to manage the economy. They can monitor the money movement in the economy and collect taxes as necessary.
They can also easily track criminal and fraudulent activities made with fiat currencies. The Government has the power to control the currency and influence the economy, establish a monetary policy, encourage financial transactions, etc.
The decentralization of the currency system means that the Government loses control after creating bitcoin. Because bitcoin’s underlying technology doesn’t allow any central authority to approve transactions, the Government can no longer regulate the monetary system and lose control. Thus, some economies do not like bitcoin.
Crime Concerns
Decentralization and anonymity make bitcoin a more attractive option for criminal activity. Cybercriminals use this bitcoin platform to steal funds from users. Many drug mafias use the bitcoin network to trade in drugs and other harmful chemicals. Terrorist organizations also use bitcoin transactions to trade weapons.
They are the main reason many governments worry about legalizing cryptocurrency and bitcoin.
Fiscal Treatment is Complex
Governments have several reasons why bitcoin is not legalized. The fiscal treatment is another reason.
The Government has difficulty planning the tax regulations and monetary policy because bitcoin is a decentralized technology. Tax treatment has been a significant concern in monetary policy.
Central Banks’ Business at Risk
With the assistance of central banks and other financial institutions, the Government manages the country’s economy and finances. Many central banks lost their businesses after Bitcoin became mainstream. This is ultimately a loss for the Government. The government and central banks don’t like bitcoin.
Bitcoin is still a young concept.
The concept of bitcoin is still very young. It isn’t easy to use a currency with a fluctuating value because bitcoin’s value isn’t stable. Some countries still have to wait a while before accepting bitcoin as a viable payment system. Many still don’t trust bitcoin. It is uncertain when bitcoin will become a global currency.
Last Thoughts
It is not known if the entire world will accept bitcoin. The growing popularity of bitcoin shows that it could disrupt the financial system in the future. If you don’t have bitcoin yet, you should consider buying goods and services with it. You can also trade bitcoin for profits. You can also opt for any Bitcoin ATM near Swartz Creek or worldwide to accept payment.
