Are you wondering why governments are trying to fight Bitcoin? If so, here’s why many states are wary about this virtual currency.
India and China are among the countries clamping down on the booming Bitcoin trade. Some governments are pushing legislation to ban private virtual currencies, with China introducing a government-issued digital currency. People can purchase and sell digital yuan within the legal.
In India, the government hopes to ban Bitcoin and enable the Reserve Bank of India to control digital money. However, people have raised concerns about the absence of adequate data protection laws. But why are such governments trying to fight Bitcoin? Here’s why some of these states dislike Bitcoin.
A primary concern for most governments is the decentralization of this virtual currency. This property means no government or entity can control Bitcoin the way they do with fiat currencies. Governments’ control over conventional currencies like yuan, dollar, and euro means altering monetary policies to influence the economy is possible. Also, this control enables governments to track money movements, collect taxes, and earn profits.
What’s more, the ability to control fiat money enables governments to track fraudulent and criminal activities. Ideally, the government can create monetary policies, facilitate financial transactions, and influence the economy.
On the other hand, Bitcoin limits government control over the financial or monetary system. Bitcoin’s underlying technology makes it a decentralized currency. Thus, no government can regulate Bitcoin or its network. And this means the government loses control over the financial system and can’t influence the economy. Consequently, many governments don’t want Bitcoin to change the status quo and, therefore, fight it.
Bitcoin is an innovation whose concept is young. What’s more, Bitcoin doesn’t have a stable value. Today, people purchase Bitcoins on digital platforms like Bitcoin Champion. Such platforms allow people to exchange fiat money with Bitcoin and vice versa. And the internet has many such crypto exchanges where people can register and start trading this fiat currency. Perhaps, you can read a review of this particular platform here bitcoin champion
But not many people know how this virtual currency operates. Apart from buying Bitcoin, people can also receive payments with this cryptocurrency or mine it using powerful computers. Also, Bitcoin’s value fluctuates rapidly within a short time. Some people have also lost funds after the platforms they invest in collapse.
For these and other reasons, some governments are wary of Bitcoin. While countries like El Salvador have made Bitcoin a legal tender, others want to wait years to consider it a feasible financial system. Also, some individuals in the government don’t trust the cryptocurrency concept. Thus, they use the government machinery to fight this digital currency.
Business use in Crime
Bitcoin provides the anonymity that criminals want to execute crimes. Ideally, some governments fear that this property makes Bitcoin an ideal currency for criminals. For instance, cybercriminals can steal funds via fake crypto exchanges. They can also pay for drugs via the Bitcoin network. Also, some people argue that some individuals use Bitcoin to fund terrorist organizations.
Bitcoin use in illegal activities is a vital concern for some governments. Therefore, they fight this digital currency to prevent its use or adoption in their countries. What’s more, Bitcoin’s fiscal treatment is complex. That’s because many governments don’t know how to treat this and other virtual currencies.
The Bottom Line
Governments around the world don’t have a clear stance on Bitcoin. And even in countries like China, where the government has banned this cryptocurrency, people trade it on digital crypto exchanges. Thus, Bitcoin’s adoption, usage, and popularity continue to grow globally despite these and other challenges. Nevertheless, Bitcoin is a new global phenomenon. Whether governments will eventually beat it or become a global virtual currency is a matter of time.