5 Reasons Why Governments and Regulators Cannot Ignore Crypto Anymore
Ever since the inception of cryptocurrency, the Government has played its role very wisely in determining the legality of Cryptocurrencies. In most countries, the Government’s stand on cryptocurrency is somewhere in the grey area.
They do not come upfront and declare it’s legal, nor do they declare it is illegal. This stance of numerous Governments of highly developed nations has made the cryptocurrency investors carry the burden of fear on their shoulders all the time.
And it has also made them think twice before purchasing Cryptocurrencies in large amounts. But I reckon the time has come For the Government and regulators to look at cryptocurrency in a different light.
Reasons for The Governments to Turn A Blind Eye to Cryptocurrencies
Let us look at why the Governments and the regulars have been ignoring Cryptocurrencies. For the sake of convenience, I will be using the term Bitcoins instead of cryptocurrency as it is the leading cryptocurrency on the planet
- Lack of Trust
Most people do not understand what a Bitcoin is. Tech-savvy people are aware of Bitcoin, yet they are not fully informed. People still show confidence in ‘fiat’ currencies, which is the term used for normal currencies issued by the Government.
People trust fiat currency as they are backed by the Government. The thing to note here is that fiat currencies are never backed by any tangible asset. For instance, you cannot return your money to the bank in exchange for gold or silver.
The fact that the Government shows full faith in fiat currency is the main reason why people still do not see Bitcoins as a lucrative investment option.
The thing that the Government fears the most is that if people start embracing the use of Bitcoins, it will disregard the entire legal banking system and that it may start becoming irrelevant.
- Crime issues
I am sure almost every month you wake up to some articles involving Bitcoin transactions. Tens of thousands of articles have been written on the risks and the crime involved in Bitcoin Transactions.
From human trafficking to child pornography. Money laundering, tax evasion, terrorism, and other illegal activities are funded by using Bitcoins. No wonder Bitcoins have formed a negative image in the mind of Governments and regulators.
The main reason why Bitcoins are used for such criminal activities is that Bitcoins leave no trace. The fact that the whole blockchain disregards the legal banking system is why Governments show no faith in Bitcoin.
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Why Governments and Regulators Cannot Ignore Crypto Anymore
Even though Bitcoins have gained a bad name in the public’s eyes, the Government has started to realize the potential bitcoins have. Over the years, bitcoins have been quite disruptive for the industries.
The Government has started issuing its Cryptocurrencies in some parts of the world.
- Controlled Inflation
Most countries in the world suffer from inflation. Issuing cryptocurrency would mean going digital. The Governments could start issuing more cryptocurrencies instead of cash. People would be able to carry their digital wallets wherever they go.
- No or Less Bank Charges
If the Government starts issuing its cryptocurrency, users would not have to pay those irritating bank charges as digital transactions would be the new norm, and most banks will do away with bank charges.
- Huge Returns
As the value of cryptocurrencies has been known to increase more than 200%, take Bitcoin, for example. Bank would provide substantial interest rates on cryptocurrency.
Apart from making headlines, Bitcoins provide some benefits that the Government can consider and think of legalizing Bitcoins and other cryptocurrencies.
The thing for the Governments to understand here is that it is not Bitcoin that is at fault, but the criminals who take part in such crimes, as the same crimes are committed using fiat currencies. This is a narrative that cryptocurrency users often hold, and it is indeed a legitimate argument.