While cryptocurrencies – the largest faction being Bitcoin – are regularly gaining popularity with the general population,governments around the world are becoming increasingly worried. Typically, conventional currencies associated with specific countries are regulated by the government, essentially so that they can dictate, track and monitor.
Value is given to a specific currency, and the residents of that countrymust adhere to all of the regulations, simply because governments
possess the power. Now, if organizations other than the governmentare immersing their own currency into society, it cannot be treated
like a government-issued currency.
So, taking all that into consideration, it’s no wonder the officials are soanxious. Let’s consider each aspect of cryptocurrency that puts fear
into the heart of governments from practically every nation.
Loss of Control
For a government to lose a certain degree of control over something ascrucial as currency, which has a direct impact on the overall economy,
it’s very challenging for them to deal with. As cryptocurrencies arepeer-to-peer networks, it places some control into the hands of the
people of the country, and therefore, challenges the control of thegovernment. As Bitcoin has become more popular globally,
governments are feeling insecure about their ability to control theireconomy’s currency.
Hard to Regulate
Cryptocurrencies aren’t actual forms of money, it’s just software on acomputer drive. That, along with identities being hidden and
Blockchain technology being publicly-accessible, creates a difficultyfor governments when trying to regulate it. What makes it harder is the fact that even though it’s just software, it’s often used to makepurchases and complete transactions, which are also features of real
money.
Worry of Illegal Activity
A valid worry for governments is the risk of illegal activity involving individuals with hidden identities. For example, if people are using the
anonymity of Bitcoin to deal drugs, launder money, traffic children, or fund terrorism, then people say that demands some serious attention.
Another aspect of crime, which we’ll touch on next, is the problem of tax evasion.
Limited Taxability
It is no secret that a large chunk of a country’s economy is from the taxing system that a government puts in place. Now, as we’ve already
mentioned, cryptocurrency isn’t classed as actual money, so it can’t be taxed in the same way. However, it is considered an asset and is usually
taxed in the same way something like gold is. But, it’s often questioned if people actually declare the cryptocurrency they own.
