The promise of bitcoin was that it would remain secure, anonymous, and the government could not touch it. The government is moving fast against cryptocurrencies, which has seen bitcoin not fulfilling its promise.
The total market capital for cryptocurrencies has dropped drastically since the beginning of 2018 and people are looking for an explanation for it. No one seems to understand why this super exciting form of payment, which seems like the future, has such a sudden drop in value.
What most people haven’t realized yet is that the market crash is obviously due to the current intervention by governments trying to take control of cryptocurrencies. That being said, no one wants to make a dormant investment, which is why nowadays many people feel safer selling crypto than buying.
No government will just sit back and watch its citizens abandon or replace fiat currency – government might be annoying but not stupid. They are not going to sit on their hands while people find out ways to evade taxes. It would be insane to think that your government will help you avoid paying taxes on your income by allowing you to receive payments via crypto.
Which Governments Have Ruled Out Crypto Crackdown?
Kyrgyzstan, Nepal, Ecuador, Bolivia, China, Algeria, and South Korea have already made a ban on bitcoin or suggested means to tighten cryptocurrency regulation. This has made owning the currency less attractive for many people.
In October 2017, the Kremlin of Russia started restricting access to cryptocurrency exchange in the country. Two weeks after the block, President Vladimir Putin issued orders that needed to be fulfilled before legalizing the market. These included coming up with a strategy that creates a single payment space, a plan to dig taxes from cryptocurrencies, and regulating ICOs.
Although the Kremlin has detailed how these measures will be put in place, it is evident that crypto exchange will not be a free market in Russia.
As more countries start to pull out of the crypto market, the trading volume of the currencies is likely to slow, something that could easily deflate their prices.
Government is Not Giving up Control of Money
The government wants to impose taxes on your bitcoin earnings but of course, it won’t let you pay these taxes in bitcoin. It wants real money that it is able to control. The only reason why every government has remained in business is that it has the power to regulate the amount of cash that circulates in the economy.
Governments control everything from the price of planting a campaign banner on your street to the cost of developing a nuclear bomb. If cryptocurrency came any close to becoming the preferred method of payment, then it goes without saying that the government will be out of business.
The government is doing everything in its power to stop this from happening. It’s just not at peace with the thought of a common citizen abdicating all government powers to mere software. It will therefore do whatever possible to wrestle control of crypto. The government will move in baby steps, sure. But, eventually cryptocurrencies will lose this battle.