The debate over Bitcoin and Cryptocurrency is reaching new heights day by day. Every day we hear new things about new technology. Some are in favor of the regulation of Cryptocurrency, while some are against it.
However, the regulators from all around the world are hesitant to take a clear stand on this matter. They are being negligent about the whole Cryptocurrency. Last year, Cryptocurrency was accepted by the IRS as property instead of currency and will be taxed as per property taxation law. This announcement made by the IRS has certainly brought Cryptocurrency more closer to mainstream currency.
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Why Is Bitcoin A Threat To Country’s Sovereignty?
Bitcoin is the first officially recognized peer to peer payment network that helps the user make safe, secure, and anonymous payments. It’s decentralized in nature and is powered by its clients rather than a central authority or intermediaries.
This slack of central authority in the Bitcoin network is what the government is afraid of. According to the central authority, if Bitcoin and other Cryptocurrencies are regulated in the market, people will use more digital currency than fiat currencies. This will loosen the grip of control over the global financial flow.
Why Control Matters?
We all know that the government controls the flow of fiat currencies. They use central banks as a medium. With the help of their authority, they create and destroy the existing financial elements—these all bones in the name of monetary policy to exert economic influence.
The central authority wants to have full detail of the finances. They track the transaction with the help of the banking sectors, dictating who makes the profit or how much interest needs to be given to the people.
They do all these things to control the financial world. However, with the digital currency in the market, they feel that their control will be challenged.
Control is indeed needed to stop several money laundry cases. However, it is also true that too much restriction on the financial flow has many downstream. Some of the flaws are:
- Nation’s fiscal policy.
- Affects the business environment.
- Increasing financial crime rates.
Only certain crime cases are brought to the surface in front of the people. Most of the criminal cases related to the financial world are lost in the middle. Every nation has a financial policy to fight certain circumstances like inflation, lack of jobs, recession, etc.
The government controls the financial flow according to the current state of the nation. If the government finds that the rate of employment is less, they restrict the flow of the currency to create new jobs.
Fiscal policies of different nations have different terms and conditions to maintain their financial flow. Hence, this also acts as one of the reasons why governments are unwilling to accept a decentralized existence.
We have seen so many crimes related to the financial world. All these events and crime is more than enough to convince anyone that untraceable currency is nothing but trouble. Here are some of the crimes that are related to untraceable finances:
- Drug trafficking.
- Tax evasion.
- Money laundering.
These crimes are just a few names on the list. The deeper you go, the denser its dark side becomes.
The Bottom Line
It’s very hard to predict what the future has in store for Bitcoin and Cryptocurrencies. However, after seeing how Cryptocurrency has evolved in the past decade, one thing is certain that Bitcoin is here to stay.
Though the regulation of Cryptocurrency is limited, people are using that as an opportunity to explore the possibilities of Bitcoin. Today Bitcoin is mostly used to purchase gifts, book restaurants, and in some places paying utility bills.