Why Governments around the World Hate Bitcoin

It’s no secret that many governments around the world dislike Bitcoin. While some countries like El Salvador have embraced Bitcoin and made it a legal tender, others are looking to regulate it. For instance, China has even gone further to a crackdown. It has also implemented a ban on this virtual currency, meaning people can trade Bitcoin legally in the country.

So, why do some governments hate Bitcoin? Here’s why some authorities dislike this digital currency.

Bitcoin and Crimes

Bitcoin is decentralized, meaning no single authority or entity can control it. Blockchain creates a public ledger with transaction history or details. However, this database doesn’t have personally-identifying information, meaning tracing the parties in a Bitcoin transaction in the real world is not a straightforward process. Ideally, Bitcoin provides the anonymity that criminals can use to engage in illegal activities.

What’s more, some individuals have lost significant amounts of funds to cybercriminals through crypto exchange hacking. Drug mafias have also used this anonymity to trade harmful chemicals and drugs. Also, some people argue that terrorist organizations have received payment for weapons on the Bitcoin network.

Nevertheless, some of these problems are possible to avoid. For instance, you can avoid losing money when trading Bitcoin by researching the crypto exchange you use. If you decide to use bitcoin era , for example, take the time to investigate it. That way, you will know what to expect once you register and start trading Bitcoin on this platform.

Decentralization

Bitcoin’s decentralization is a primary concern for many governments. Ideally, governments control conventional currencies like Euros, Yuan, and Dollars because they are centralized. And this control allows governments to change monetary policies and run the economy the way they desire. Tracking money movement in the economy enables governments to collect taxes and profits from the traditional financial systems.

Conventional money control enables governments to track fraudulent or criminal activities that involve cash. Thus, governments can influence the economy by creating monetary policies and fostering financial transactions.

Bitcoin’s decentralization means the government will lose this control if people embrace it. That’s because the underlying blockchain technology doesn’t allow a central authority to control this virtual currency or regulate its movement.

But that’s why Satoshi Nakamoto created this digital currency. Bitcoin’s primary role was to enhance anonymity and individuals’ freedom to control their finances.

Bitcoin’s Newness as a Concept

Bitcoin presents a new concept. Its value is not stable, making its use in daily transactions difficult. Perhaps, that’s why some governments are yet to consider or embrace Bitcoin as a financial system. What’s more, even some individuals don’t trust the Bitcoin concept. Whether Bitcoin will become a global currency is a matter of time.

Nevertheless, some people have become millionaires through Bitcoin trading and investing. Thus, early adopters are likely to benefit from this virtual currency than those who wait to see how things turn out. What’s more, countries like El Salvador have become early adopters, making Bitcoin a legal tender.

Central Banks Business and Fiscal Treatment

Central banks enable governments worldwide to control their countries’ economies and finances. If Bitcoin becomes a mainstream currency, central banks will lose their primary role. Eventually, this will also be a loss for the governments. Therefore, central banks and governments dislike Bitcoin.

Also, Bitcoin operates via a decentralized network on the blockchain. And this makes planning tax regulations and monetary policy hard for the government. Thus, governments fear that tax treatment will be complex if Bitcoin becomes a mainstream currency.

Final Thoughts

Bitcoin seems like a threat to conventional money and governments because they could lose economic control if the world embraces this digital currency. However, this cryptocurrency’s adoption grows while governments try to control it. How things turn out will be a matter of time as Bitcoin is almost impossible to regulate for a central authority like a government.