21:32Can Governments Stop The Bitcoin Train?
As many governments around the world move towards regulating cryptocurrency, this digital form of currency is still viewed with skepticism by the leaders of many nations. The threat this poses to the existence of cryptocurrency varies throughout the world, with some governments such as India, contemplating a ban on crypto assets, and others like Bolivia having banned cryptocurrency for several years.
In countries with worsening civil unrest and economic conditions, cryptocurrency adoption by individuals seems inevitable. And with the regular rise and fall of governments in Latin America, the increase of p2p trading is not likely to decrease as local fiat currencies are viewed with further distrust.
With Latin America fast becoming a hotbed of fintech, cryptocurrency adoption by individuals has grown as a means to store value. This is due in part to the distrust of local fiat currencies, and driven by the lack of banking access for around 50% of the population, according to a study by the World Bank. There are, however, several Latin American nations that are not entirely happy with the existence and use of cryptocurrencies within their country.
In Bolivia, for example, there is a complete ban on cryptocurrencies, with the current government unlikely to reverse the crypto ban implemented in 2014 by Evo Morales’ left-wing party. In a similar vein, India is reportedly fast-tracking its Cryptocurrency and Regulation of Official Digital Currency Bill 2021, which will introduce the development of the digital rupee, while banning all other cryptocurrencies.
The attempts at regulation of cryptocurrency does not seem to be enough to stop individuals and corporations from exchanging their local currency for Bitcoin. The introduction of a Central Bank Digital Currency (CBDC) is something that many countries have been considering for a while, further accelerated by the global pandemic and increase in online payments. Some advocates of cryptocurrency are viewing the future arrival of government digital coins as an incentive for regular citizens to move towards cryptocurrencies.
In contrast to cryptocurrencies, a central bank digital currency would be centrally controlled, and therefore would not require blockchain technology to sustain it. On the other hand, Bitcoin sustains itself on the fundamentals of being completely decentralised, and democratic.
Whether in Latin America, India, or Singapore, attempts at banning or strict regulation have thus far been limited to a handful of nations, with great pressure by advocates of cryptocurrency to overturn this.
With Bitcoin at a record high, and mainstream corporate investment, ( BNY Mellon, Mastercard Inc, and Tesla to name a few recent big names) volatility - the often weaponised word used by crypto sceptics, is likely to reduce as the market becomes more established.
Regulation is almost inevitable, and indeed welcomed, to some extent. It will bring on board more investment, as governments acknowledge the role of cryptocurrencies - even as they introduce plans to implement CBDCs.
As Bitcoin overtakes $50,000, forcing crypto sceptic Peter Schiff to eat his hat after his famous “Bitcoin will never reach $50,000” tirade, and corporate investment streams in, it is getting more difficult for governments to avoid debating Bitcoin. While the approach by several countries would be to try and snuff it out, the tide is coming in far too quickly, and one of the most likely ways governments will try to downplay Bitcoin, is through the creation of their own digital currencies - the relative success of which is still to be seen.
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