Topic: Cryptocurrency will always be threat to government (Read 271 times)

It is worth distinguishing that there are generally two different types of government - those that are authoritarian who want control at all costs and governments that are generally benevolent with a light touch. Depending on where you are brought up you might not be able to consider that a government can work with somewhat low levels of corruption and is able to function for the benefit of citizens most of the time. An authoritarian government is the most dangerous type and what every leader with psychopathic tendencies would love to rule over - however history has proven that they all tend to fail over a large enough time period. Sadly this type also ruin the trust between the average person in a country and prevent competent institutions from functioning properly, which makes it very hard to fix when they go. A general free society should allow cryptocurrency, but because it can be abused by criminal means it should be closely watched and some actions against it might be perceived as banning (e.g preventing leverage trading)  - when it is just intended to protect the least educated from scams.

The actual threat is not cryptocurrencies like bitcoin but what the government fear is loose of control in their hands as they can manage and print crypto accordingly but they can't control btc and anything which they don't have authority over fears them.They don't like to give them freedom of funds and think that banking system can collapse with its usage and people will prefer to use these digital coins only and that's why introducing these CDBC but that cannot compete with decentralised bitcoin.But in the end they have to support it.

Just with the fact that cryptocurrencies offers financial freedom to many considering that it is decentralized makes it an enemy of the government already. Since they cannot get a hold on it or control over it means they couldn't put tax or gain any benefit from it. That would lead them to think that it should be stopped and be restricted since none of them are able benefit from it and the citizens are recieving much money where they couldn't get a part from it. But later on, crypto will dominate and the government wouldn't be able to stop it so let us take advantage of the moment while we still can.

What happened if all government bodies have a mutual decision over those privacy coins? So the only way we want to trade those are thru dex? Some of these coins have own blockchain and only few got crosschain supported. This is just an assumption scenario, but could be in the futurr if the government decided and join hand in hand to battle those coins.

Yeah.

We saw some of them were against to bitcoin for some reasons but eventually, they've lifted it and started to support it. These countries sees the good from it and just forgets about what they've thought of it badly.

I guess the idea that they've thought of it badly is when everyone talks about bitcoin is the only money in the deep web/dark market and is only used for illegal transactions.

But as they've understood it correctly, they have adopted and supported it.

Yeah, especially with the various laws around Know Your Customer (KYC). At least, when you use a non Peer 2 Peer exchange, they can track every movement of your money, and make sure you are declaring your taxes. However, the real issue for them currently is more, and more people are going to P2P exchanges, and using them for lower fees, and for improved privacy. They may well try, and disallow the usage of P2P exchanges in the future, since that wouldn't comply with KYC. The reason I think this might happen is they've already demonstrated that if cryptocurrencies can't comply to KYC, they'll be removed. For example, privacy coins being removed from exchanges. Don't get me wrong, it wasn't the exchanges choice that they did that, it was more than the law dictated their decision, and forced their hand because the government are becoming increasingly strict on KYC.

The reason for the government’s opposition to cryptocurrency may be that it feels that it cannot control cryptocurrency and reduces the control of people in the government. If everyone uses cryptocurrency, the government feels dangerous. There is also the use of legal currency that has been stolen or deceived. The government can help to retrieve it. However, some countries set Bitcoin as legal currency because they want to get rid of the constraints of some major countries. However, no country has completely banned cryptocurrency.

The pseudo anonymous cryptos are rather boon to government as they can effectively track down the source, private cryptos - they might not like 'em that much.

I appreciate governments who are doing it. Maybe they can see what is the better future, that's why they will start supporting it, there are a lot of cases like this like at first -> they don't support, ban it -> but after a short period of time, they changed their mind and start supporting it.
As what famous quote says, "If you can't beat them, join them".

That's for sure.

But we saw some governments despite that they know decentralization is against to their advocacy, they're able to benefit from it by supporting it and giving a go signal to continue its support by not banning it.

Well, if all governments are like this. Every country is going to be a crypto haven.

Its mainly third world countries, or lesser developed countries which have adopted this approach. Potentially banking on the fact that it could potentially spring them forward in terms of developing the country. There's also the possibility it could be politically motivated, since most countries are governed by similar types of government, and by that I mean they tend to want to control their citizens. China can be used as a drastic example where they are much more open about censoring their citizens, but I believe USA/UK are also following a similar approach, except in a different manner. Anyway, getting back to the point,  most governments want to remain in power, and therefore they want to control the population, Bitcoin kind of goes against their objectives, as it gives a little more freedom, and power to its people.

I'm personally not reading too much into the implementation of Bitcoin as a currency in the announcements recently as I can't really determine the motive accurately. While it does seem they are supporting Bitcoin, it just goes against what I've come to expect governments to do, and therefore I'll reserve my judgement until later.

Since you already know that because of the decentralized nature of cryptocurrency, the government is always against it, and at that government will constantly make policies that will affect the use and development of cryptocurrency.

The world of cryptocurrency is free, and I prefer it to be a technological revolution, which will bring more freedom of imagination to future life. For example, in the past, the company’s stocks had to be approved by various institutions to be listed, but now every Individuals can issue digital currencies, some to raise funds, some to facilitate payment and orderly output of value, and some to do illegal things. For countries, legal currency, as the mainstream currency, will definitely affect the economic order it builds. It is considered a great threat and affects the stability of the economic order. Some countries regard Bitcoin as their country’s legal tender. Some countries seem to repel the digital currency-Bitcoin, but they are still actively hoarding Bitcoin. But it is undeniable that we have begun to enter the digital age, and there will definitely be a financial and monetary system that matches this era. So, you think it’s not important to be a threat, it’s just a matter of accepting time。

Not all governments against crypto as we know some countries already accept crypto and allow their people to use crypto.
The meaning of against in this point is because they still need time to accept crypto and still learn about the advantage and the disadvantage of crypto to the government itself.
I am sure if they understand the benefits of crypto, they will not against instead, they will use it too like the others.
Even I think some of the government and banks officers who are open-minded about the new thing use crypto as an investment.

Some countries have chosen to stand on the opposite side of cryptocurrency, while some countries have chosen to accept cryptocurrency transactions or even use them as the country's legal currency. I guess the most fundamental reason why most countries do not accept or prohibit crypto transactions is that the government cannot supervise it. It is decentralized and has impacted the traditional domestic financial model. The government will think that some people with bad intentions will launder money through cryptocurrency. , This is possible, but I think most governments are also aware of the innovative and revolutionary nature of the blockchain, and are also studying the blockchain themselves. Only created by the government, it will be a regulated currency system that uses blockchain technology, but is essentially a centralized currency system. They always want to control what is in their hands.

That "money laundering" stuff was the one I read when I was being KYC'ed in my own custodial wallet. They're trying suppress that scheme.
It is obvious that government just saw Bitcoin and other cryptocurrency as a way to do those schemes, while in reality it is not and yes, even fiat does the same thing. It will go the same for the scams happening around the crypto space.

Yes, but not necessarily for the right reasons, or “right” in accordance to our own individual freedom and privacy. For example, these days I was going over a proposal made by the ruling political party in Spain, calling for the Spanish Government (which it is part of) to look into the potential implementation of the digital Euro (as it there is likely going to be much of a choice eventually).

Part of the favouring arguments included within the proposal (https://www.psoe.es/media-content/2021/05/210528-PNL-euro-digital.pdf - in Spanish) state that (translated):
The threat comes, in any case, obviously from decentralized or private payment methods, but it also provides an opportunity for control, as stated in the above quote.

To an extent, yes, but they are not really worried about crypto per se, but they just hate that they are not getting a cut out of it, just like the mafia Governments are trying to adopt different forms of cryptocurrencies to try to bridge the gap, but I think we have a distorted view here. We are in a crypto bubble and it seems to us that everyone is using or will start using nongovernmental cryptocurrencies, but that's just not the case. The usability percentage is still very low and crypto being a real threat to governments is still really really far away.

I am curious if cryptocurrency is a threat to the government, why some countries or governments are starting to look about cryptocurrency,
and if you heard recently, a lot of people already started talking about Central Bank Digital Currency (CDBC), which is very huge once become implemented in most countries.

I think you need to move this post in the economics or bitcoin section because the post would be more likely to fit in those section being mention. Anyway, the best thing about cryptocurrency is more likely to balance everything that is centralized more likely to the government. However, I do not consider cryptocurrency as a threat to the government or any agency it will all depend on how they will adapt.

There are some reasons why government will act like this and against cryptocurrency. Because not all government is against crypto.
1. Regulation in that country
Sometimes, the regulation states only that crypto is not available to be used as a currency because they only have standard currency to be used as a means of payment in that country.
2. It is political, yeah, some people in the government also don't like crypto because of the politic strategy, it is the most common happen, there are many interests on crypto, about the wealth and also other interests.
Additioally, there also some instititions that are against the crypto because it may decerease their value and also peopleinterests in that.

And I may also agree with some people arguments about taxes, there are some countries with no taxes for crypto, this is also the reason why it is againts. Or because they cannot also regulate crypto.

It depends on what you mean by cryptocurrency.
There are already some government issued cryptocurrencies in the making so we cannot generalize like that. Furthermore, if governments regulate cryptocurrencies' business and trading, then I do not see why their presence would be a threat.

You may be right but some country will adopt bitcoin by creating their own platform. For example, they will create an exchange, wallet or a wallet where you can buy and sell crypto but there is a spread when you buy and sell. I have experienced it myself where for example I want to buy bitcoin worth $500 dollars but the bitcoin I received is 0.01436279 and when I sell the same amount of bitcoin I got $480+.

Governments sooner or later usually find their way around things to impose their dominance and control, but the situation with Bitcoin and other dex crypto is somewhat different, there's no government that will be able to ever control it, print it out, or be a body running it's affairs, in that case, it's a situation that the government would never be victorious in, thus how do they attempt to get back at the network, they do so by imposing regulations, and erroneously believing that their CBDC's would be a competition to a decentralized coin like Bitcoin.

Having said that, I know quite a few countries may not have banned or regulated dex crypto, but they are mostly small nations; the bigger countries that would prolly have contributed to mainstream growth are actually going on with their crackdown, China, U.K to mention a few, I think this big countries are actually pursuing centralized economic dominance, thus they don't want their citizens to "be their own bank", and they want to encourage them to use only one digital currency, being their own digital fiat.

Not all government but since majority are doing this I understand the need to generalized. Government like that of US and China, including others giving Bitcoin a hard time, all know the true potential the currency has to disrupt the existing currency which had failed. They fight it because they don't want it to succeed but failing to realized they're actually giving Bitcoin more publicity by so doing.

It must not always be this way though, they government don't have to always see bitcoin as a threat instead they can see it as an improvement on the existing currency industry and make it to good used as country like El Salvador has done by legalizing it.

you definitely can't make this claim now that there are many countries that have accepted bitcoin with open arms. the most recent one is El Salvador that accepted bitcoin as legal tender. so you can see that bitcoin is not a threat to "all" governments, just the ones with corruption that feel threatened that they may lose their grip on money printing and their control over economy.

yes, this is an additional demand for dollars, for this reason it is not forbidden to buy gold, too

The governments will likely increase regulation on cryptocurrencies, at least while fiat currencies are the mainstream currency. So, while governments won't be able to manipulate or destroy cryptocurrencies, they will, and have been regulating them giving less of an incentive to those that want to get into cryptocurrencies. Also, the governments control the news outlets, and if they want, and I believe this probably has been the case, they can influence the public opinion via propaganda. So, while Bitcoin, and any other cryptocurrency for that matter won't be destroyed by the government, the governments can most definitely limit, or slow down its influence on the public.

Some reason is that they think that Bitcoin or cryptocurrency in general, is a threat to the financial system institution and it could be used in any criminal activity such as money laundering or any illegal purchase that could be used against terrorism that could harm the government.  But in fact, fiat can also be used for illegal activities as I mentioned above.

Another reason is the threat of the business in the central banks when Bitcoin has become in the mainstream and everyone didn't put money on the bank instead, investing into Bitcoin.  This is also a big loss to the government since central banks and governments are helping each other with the aim of economical growth.

The last one is, most crypto holders can hide their assets through crypto and avoid taxation.  Since it is decentralized in nature, governments are at a loss of control over it.  But overall as a crypto user, it will always have a benefit on us than the government.

OP I suggest you move this topic to Economy board. That is more fitting for this discussion. Although this topic has been discussed countless times I'm sure members would still love to drop their opinion on the matter

It's obvious from initial that government always kick against cryptocurrency especially bitcoin, before bitcoin became viral across the continent's, their was no challenges or opposition who interrupt the uses of cryptocurrencies from the day bitcoin was introduced in 2009, but just of a sudden bitcoin became enemy to government, "why? Because bitcoin is not centralized and it can't be controlled by government agencies, but at some certain points some countries who rejected the adoption of cryptocurrency especially bitcoin started allowing bitcoin transaction's to her country,

Now giving a census of countries as across the world that they government adopt cryptocurrencies or values bitcoin is few, but using figure as illustration's, if  countries is hundred percent (100%), it's not up to thirty percent (30%) countries that adopt the use of a cryptocurrency fully. So compare the statistics, then you will notice that it's obvious that government is against bitcoin generally.

I seen that the major factor or reason while government is against bitcoin is because they Lacks finance in their banking system currently, and they are into transactions with bank Management's, and the money in the bank that belong to people they invest with the money to yields profit for them, and now it has been used to invest in cryptocurrency by the rightful owners, This is from my perspective.

The government of some countries like to take the full control over all happening in the country, that is why such government will try all their best to make it possible for their citizens to not use what is beyond their country or that can not be centralized, cryptocurrencies are not centralized which makes many banks to be affraid of the future, supporting the governments to make sure cryptocurrencies are not legalize in their country, but with all these happening, cryptocurrencies are growing while some counties are supporting it and deckear it not illegal.

A better thought process on this is that it is a threat because they cannot control it. They couldn't control the supply or even manipulate the data in the publicized legder. I don't think they would be willing to show their every transaction because they might get questioned for it or something. I think it could be a great idea for those supporters from the government to sign a message and acknowledge their wallet addresses and show that they support it and check their every transaction etc.

It's normal everywhere, even the human body itself also offers some resistance to what is foreign to it worst still, what is above its control and to some extent would affect the way things are done in the benefit of the formal. So, I don't blame the government for revolting against crypto just that, it feels sad that, the government is not about the citizens themselves but, how it could take care of itself and how the citizens are minimally considered in course of doing that.

The government is supposed to be for the people but then, the story is changed. As government generally view the masses as a powerless and poverty stricken people and instead of seeing bitcoin for the good it can do, the financial freedom and liberty it could bring, its being viewed from the worst that could happen and how it won't help the economy. So sad!

something new, often not accepted by society, business and government, this has become a very common thing in the world of technology. But, slowly all who had resisted began to see the potential, which finally accepted the presence of the technology. Currently, the government is not completely against crypto. Indeed, some reject it, but some accept it only as a commodity asset and some have also accepted crypto as a currency in their country. This is proof that governments that reject BTC and other cryptocurrencies today are just biding their time, because in the end, once tizens accept crypto, inevitably, they change their policies. The government in my country, Indonesia,  also reject crypto, but then they changed the rules and accepted crypto as a commodity asset. Maybe, other countries are the same, they refuse to make BTC a currency and commodity in their country for now, one day, along with a change in leadership in that country, it could also be a change in crypto-related regulations.

Some Governments are against crypto used as a currency but they are not against crypto as an investment asset. There's a big difference between the two. They may not like it but authorities cannot ignore the fact that people are moving their money to crypto. So what do they do? They'll just regulate centralized exchanges and tax traders or investors. That's easier and more beneficial to them.

The government always go against things when they are not fully in charge and having control over it. Government can partially or not at all accept cryptocurrency because cryptocurrency is a threat to the government. Already many people knows about the benefits of cryptocurrency and if it's not challenged by the government many people won't  be willing to do their savings or business with the central bank ,instead they would prefer to invest their money into cryptocurrency because of it interest they will gain and other benefits.
Government will always be against it, but it can't stop the existence of the cryto world