Topic: Will Governments Ever Accept Blockchain-Based Cryptocurrencies? - page 3. (Read 506 times)
this is a difficult step that makes the government hard to make decisions, the reason is simple, namely the income. if bitcoin and atlcoin are still in a state of decentralization the government will not allow bitcoin, because they cannot collect taxes anywhere and anyone.
That is why most government doesn't want crypto due to decentralization. They cannot tax transactions that are anonymous and something they have no control of. Instead of peole using banks for their huge money transaction, people opt to use bitcoin for convenience where the government is not aware of.
At present, Bitcoin and several other forms of cryptocurrency are at least partly regulated by world governments. In fact, cryptocurrency is only illegal in a handful of countries including Bolivia, Sri Lanka, Ecuador, and Vietnam. The only question is, will world governments ever really recognize coins like Bitcoin as legal tender?
What Does Acceptance Mean?
For the most part, mainstream government acceptance of Bitcoin and other cryptocurrencies is a non-issue.
In the United States, Europe, and the UK, it is already possible to buy everything from a cup of coffee to a family home using cryptocurrency. What many people, therefore, mean when they ask if cryptocurrency will ever become more widely accepted is, will governments themselves ever transition to using digital currency?
Why Governments Won’t Transition to Blockchain-Based Cryptocurrencies as we Know Them
For the foreseeable future, it is unlikely that governments will ever consider cryptocurrency equivocal to government-issued fiat cash. Moreover, this is mostly due to the potential for tax avoidance.
In the United States alone only 100 people out of a sample size of 250,000, could be evidenced as declaring cryptocurrency capital gains on their 2018 tax return. What is more, decentralized cryptocurrencies like Bitcoin interfere with more than just tax collection:
Privacy coins like Monero are still used to facilitate crime and other dubiously legal clandestine activities
Decentralized mining of coins like Bitcoin, make it impossible for governments to control their own money supply and policy
Cryptocurrency is still not backed by anything tangible
Digital currency is inherently deflationary, whereas governments depend on inflation to encourage economic growth
A much more significant problem also rests with the fact that many governments still don’t fully understand how coins like Bitcoin work.
Governments May Become More Accepting of Cryptocurrency Eventually
While world governments might be unwilling to embrace cryptocurrency itself, the same is not true for the blockchain technology which underpins how coins like Bitcoin work.
At present, the UK and the United States already settle international payments via a Ripple XRP payment gateway. Moreover, the Ripple Foundation is regularly invited to attend major economic summits like Davos and Europan Central Bank conferences discussing the future of retail payments.
Governments Don’t Like Decentralization
In Venezuela and Zimbabwe at present, out of control hyperinflation is resulting in rapidly declining living standards. In both cases, the official adoption of cryptocurrencies like Bitcoin could help tackle hyperinflation head-on. However, governments don’t like centralized coins. Hence why Venezuelan President Nicolas Maduro has insisted on creating his own national form of cryptocurrency, the Petro.
Government Issued Cryptocurrencies May Eventually Become Commonplace
While it might be difficult for Bitcoin purists to accept, the first step toward national acceptance of cryptocurrency will likely rest with governments issuing their own centralized blockchain. Coins like Venezuela's Petro may, therefore, eventually become commonplace. However, top coins like Bitcoin will likely survive as they do now on the regulatory sidelines.
What Does Acceptance Mean?
For the most part, mainstream government acceptance of Bitcoin and other cryptocurrencies is a non-issue.
In the United States, Europe, and the UK, it is already possible to buy everything from a cup of coffee to a family home using cryptocurrency. What many people, therefore, mean when they ask if cryptocurrency will ever become more widely accepted is, will governments themselves ever transition to using digital currency?
Why Governments Won’t Transition to Blockchain-Based Cryptocurrencies as we Know Them
For the foreseeable future, it is unlikely that governments will ever consider cryptocurrency equivocal to government-issued fiat cash. Moreover, this is mostly due to the potential for tax avoidance.
In the United States alone only 100 people out of a sample size of 250,000, could be evidenced as declaring cryptocurrency capital gains on their 2018 tax return. What is more, decentralized cryptocurrencies like Bitcoin interfere with more than just tax collection:
Privacy coins like Monero are still used to facilitate crime and other dubiously legal clandestine activities
Decentralized mining of coins like Bitcoin, make it impossible for governments to control their own money supply and policy
Cryptocurrency is still not backed by anything tangible
Digital currency is inherently deflationary, whereas governments depend on inflation to encourage economic growth
A much more significant problem also rests with the fact that many governments still don’t fully understand how coins like Bitcoin work.
Governments May Become More Accepting of Cryptocurrency Eventually
While world governments might be unwilling to embrace cryptocurrency itself, the same is not true for the blockchain technology which underpins how coins like Bitcoin work.
At present, the UK and the United States already settle international payments via a Ripple XRP payment gateway. Moreover, the Ripple Foundation is regularly invited to attend major economic summits like Davos and Europan Central Bank conferences discussing the future of retail payments.
Governments Don’t Like Decentralization
In Venezuela and Zimbabwe at present, out of control hyperinflation is resulting in rapidly declining living standards. In both cases, the official adoption of cryptocurrencies like Bitcoin could help tackle hyperinflation head-on. However, governments don’t like centralized coins. Hence why Venezuelan President Nicolas Maduro has insisted on creating his own national form of cryptocurrency, the Petro.
Government Issued Cryptocurrencies May Eventually Become Commonplace
While it might be difficult for Bitcoin purists to accept, the first step toward national acceptance of cryptocurrency will likely rest with governments issuing their own centralized blockchain. Coins like Venezuela's Petro may, therefore, eventually become commonplace. However, top coins like Bitcoin will likely survive as they do now on the regulatory sidelines.
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