Topic: What the government expect from bitcoin legality? (Read 330 times)

Looks like I've heard enough of your opinion by now although it seems that some of you have the same opinion as other users. But no problem, I now have a bit more information about my question in the thread and thanks everyone for sharing your opinion with me even though I had to wait for the first poster more than 10 hours since this thread existed. 

And now, this thread is locked.

The government hopes of course the benefits for the country, as the government of El Salvador is currently doing they legalize bitcoin and make it as a legitimate transaction tool they are very hopeful that in the future they can get a big profit for the country in the future, and those who make investments of course individual profits can also be obtained if later the price of coins can reach the target that has been set, In this case the government of El Salvador must have made the best possible regulations so as not to harm his country.

No need to legalize, the government can do anything with the state budget based on internal policies. And bitcoin is decentralized for anyone who wants to invest that there are actually no legal restrictions.

The government hates decentralization, legalizing bitcoin is just an attempt to make it a bit centralized. Just look at how Elsalvador created the Chivo (centralized) wallet.

You have to also look at the contradictory side, some people have had no luck dealing with crypto. After all, bitcoin was not created to change the standard of living. One has to find the ways, not the tools.

When the government sees the benefits of bitcoin, they see that they can make more money from buying and selling bitcoin like what regular people did in trading. The government can also use bitcoin as reserved for their funds besides using gold to protect the value of their money. But they need to know that the bitcoin price has volatility and could go anywhere.

The government gives financial freedoms to their people by using bitcoin because their people can use bitcoin to make money from buying and selling bitcoin. Besides that, if their people can have a new source of income in bitcoin or cryptocurrency, they can survive and generate more money in this pandemic and the future.

Maybe the government can get taxes from the bitcoin user because they can track the people's transaction from their bank and know how much money they could earned from bitcoin.

I'm answer what has happened in my country when bitcoin was discussed by the finance minister in my country. Volatile prices are not a criterion for a country's investment. they mostly want definite profits. and wallet security is also not 100% guaranteed not to be lost or stolen. fortunately, even though they are aware of this, there is no prohibition against citizen in my county from buying, storing and trading .

But, it is expected bitcoin may help people to fight against inflation which is more important along with providing job. I am seeing many people who are suffering after retirement. I worked hard when they were able to, and we cannot expect everyone to be working till the age of 70 or 80 hence governments must work on providing people power to fight against inflation which is highly possible through adapting bitcoins legally.

This must be a concern for most government like they want their people not getting suffered by investing and losing by any means. I believe governments must have started studying bitcoin and then they will come to know about the true potential of bitcoin then they may not have problems to make bitcoin legal.

I don't think that at some point the government will completely replace the current financial system with crypto or bitcoin, even if it becomes a global wide accepted, because not only it will render their control impossible and because some people still don't want to use it, and El Salvador is a great example for that, as people thought that they will make bitcoin the main currency and lead to their local currency becoming useless but luckily they were smart about going with giving the freedom to the people to chose, and at the end of the day that is the purpose of using bitcoin and crypto, is to have freedom and control over when and how you wanna go about doing your transactions, and to me that is what all the government should get from the Salvador experience and that is what they should be looking for in illegalizing bitcoin.

Bitcoin is not issued, endorsed, or regulated by any central bank. Instead, it is created through a computer-generated process known as mining. In addition to being a cryptocurrency unrelated to any government, bitcoin is a peer-to-peer payment system since it does not exist in a physical form. As such, it offers a convenient way to conduct cross-border transactions with no exchange rate fees. If bitcoin will be legal to government it will increase it's confidence in the eyes of the public. Cryptocurrencies will also grow faster with the legality of the government and I know we all expect this to happen.

This is pretty much it.
Custodial wallets here in my country are quite strict when it comes to KYC especially when you are looking for a cash out from Bitcoin. They are sometimes doing video interview in cases of such large amount of money being cashed out of Bitcoin, since 1 whole coin pretty much makes one a millionaire in here.

I would go with the first option you provided: which is a way for them to generate income for their country and the people.
As for the two other options, I am not so sure about those ones. Reasons why I am not so sure about them is because: talking about the second option which is about giving freedom to people, I don’t think the government would like to give people 100% freedom when it comes to finance, they would also like to be in control when it's something that has to do with money, take for example they would like to know where every transaction is going to and where it is coming from, information like that would be important to them.

Then talking about the last option which you said that they want to improve people’s standard of living, I don’t think that is really possible with Bitcoin and cryptocurrency in general: if the government wants to improve people's standard of living, then they will have to do that by providing jobs for the people and not through cryptocurrency.

For anyone to really gain anything from cryptocurrency they will have to invest money, and not everybody has the money to invest in cryptocurrency. That is just my opinion, I can’t really tell you what the government really wants from cryptocurrency when they legalize it, it is up to them, they all know their plans.

That will increase confidence in bitcoin in the eyes of the public, the state, the apparatus, as a whole in a country. Cryptocurrencies will also grow faster with the legality of the government. We all expected this to happen.

No, governments have all the wealth they need, they can generate wealth themselves by increasing taxes on its citizens, or simply creating more currency out of thin air. They don't need any extra wealth as long as they have financial control over their citizens, so Bitcoin acts against their interest. El Salvador adopted Bitcoin because their economy wasn't doing well to begin with, so it's not as if they had much power to begin with.

US and China have large economies and have propped their own respective currencies up, on the other hand. Their idea of "generating" wealth involves increasing the money supply.

It mean that the government is obliged to socialize what bitcoin is, its advantage, how it works, how to use it, its disadvantage, its effect on macro and micro economics, etc. to the public before they legalize it as a legal currency? If that's what you mean then I have to agree with you and this is part of the pre-legalization preparation for something new for national use like legalizing bitcoin as the legal currency of a country. I think the government need a few years to carefully prepare everything before they leave it to parliament to decide.

Financial freedom is undoubtedly the reason for the government to legalize bitcoin as a legal currency, because the government has always wanted control over bitcoin and its users with rules like KYC & AML. This is their way of reducing dependence on other currencies and the legality of bitcoin would be easy to consider in a small country like El Salvador compared to developed countries.

It will divide people if they don't properly make them understand on how this new system will work on their economy so before they execute their plan to accept bitcoin on their country and make it a legal currency they should study first its possible effect to the people or the merchant and also they should do it slowly until their citizens will figure out on how to use the new technology introduced to them by their government. For sure many will impose since its nature of people if they don't understand they give a bad impression on it so government should not rush things on adoption if they want to do it.

Some small countries may indulge into investment or even mining like El-Salvador is planning. But I don't think any other country will commit their resources to such things. But don't be surprised if few other small countries start mining in future. Government movements are unpredictable so you never know what's coming.


Lol! Governments have millions of other ways to achieve the same! Since they have not explored those million ways,  I don't think they will let bitcoin do it. Rather if they allow bitcoin to help their people to achieve financial freedom, that will expose their own inefficiencies.

What I strongly believe that if a government legalizes bitcoin in their country, the main moto is revenue. Tax revenue from bitcoin users, tax revenue from exchanges etc. And the tax percentage will be much higher than their normal tax slabs. For example you can see Japanese crypto tax structure.

Actually, countries can be divided into two groups. One group of country contradict crypto and try to forbid everything connected with it such as China, another group that I consider to be more wise, don't shub advantages of crypto and try to involve in crypto market so as to take benefit as well such as US, Salvador.
I don't think that authorities really want to give freedom to all people as it is deadly for them to get a free person instead of obedient citizen.

as bitcoin develops later, of course the government will impose new regulations, although not with regard to bitcoin legalization, but increasingly transparent regulations will certainly be applied. because we know the main reason the government has not been able to legalize it is because of its uncontrollable nature. but at least we can still use it as a tool to make money

All governments certainly want the country and its citizens to be more advanced and can be reduced from poverty. Here Bitcoin as one thing that is already increasingly visible potential into the future because so far it has been able to cover the problem of poverty or lack of jobs. Because of its existence on the internet... of course this can be a new breakthrough as a new thing that can advance its citizens, which of course can help with economic problems, especially during the pandemic so far.
But not only in a pandemic situation, I think Bitcoin actually deserves to be maintained as a currency that should be legalized, well maybe because many things are still being considered regarding government regulations, the banking system, etc. Bitcoin seems still on the threshold of its recognition, which in fact the government definitely wants to take the positive side of Bitcoin's advantages.

The additional thing here, people or government should not always think using Bitcoin is already your are investing of it, there are lot of uses for Bitcoin, as it first is a mode of payment, be your own bank, and financial freedom since no one can control your Bitcoin or Bitcoin itself.

For sure, there are still a lot of laws or some regulations that will come in the future regarding Bitcoin but again, they can't touch Bitcoin or control by them, that's how Bitcoin was built.

I think your every step is correct. Essentially, there is a reason why the government has not adopted bitcoin, and that reason is its lack of control.How can the government collect taxes if it cannot control its transactions?And we all know that the government collects taxes on every single penny of every transaction we make via fiat, bank, or bond, or whatever is legal in our country through the government.We know why gold, diamonds, and these types of things are highly recommended by the government as investment assets. This is because the government can control its market and generate tax from buyers and sellers both. So the basis of government is all about tax. They don't care about your financial freedom, but I think that is a risk factor for them.