Will bitcoin be banned

Will Bitcoin Be Banned?

Will Bitcoin Be Banned? Bitcoin was introduced in late 2008. Inventor Satoshi Nakamoto intended it as an alternative to traditional currency after the global economic crisis that brought down world markets.

At the time, nearly everyone expected Bitcoin to be a fad. Cryptocurrency was viewed with skepticism outside of the tech community, except for a handful of individuals and businesses who wanted to keep their financial transactions anonymous.

Fast forward ten years and by 2018 the landscape had changed quite a bit. Bitcoin ATMs were available in multiple nations, and a small number of mainstream companies accepted Bitcoin as payment for goods and services.

Nonetheless, some of the biggest names in financial circles remained unconvinced. That year, Warren Buffett gave his often-quoted assessment that, “in terms of cryptocurrencies generally, I can say almost with certainty that they will come to a bad ending.”

However, Buffett’s appraisal notwithstanding, Bitcoin was just about to hit a tipping point. Within months, it was embraced by major organizations, and its use as a mainstream store of value has been growing ever since.

To date, Cathie Wood, an investor specializing in innovation and disruptive technologies, has made a big bet on Bitcoin. Companies like MicroStrategy (MSTR) and Square (SQ) are trading some of their cash for Bitcoin to hedge against inflation, and leading digital payment service PayPal offers consumers the option of buying, selling, and holding Bitcoin in their accounts.

The biggest news came in February 2021, when Tesla’s Elon Musk made an important announcement. The company purchased $1.5 billion in Bitcoin, and it would start accepting Bitcoin as payment for Tesla vehicles by the end of the year.

As Bitcoin and other cryptocurrencies gain momentum, fans and critics alike have questions. Will Bitcoin be regulated? More importantly, will Bitcoin be banned altogether?

History Warns Bitcoin Could Be Regulated

One of cryptocurrency’s goals is to move stores of value and payment transactions outside of the central banking system.

If Bitcoin and other digital currencies succeed on a large scale, one of the biggest challenges would be to ensure appropriate taxation. Anonymity makes Bitcoin assets nearly impossible to track, which means problems for governments attempting to assess income and capital gains taxes.

The second concern international governments have around cryptocurrencies is loss of capital control. At its core, this is the work governments do to manage the flow of foreign capital in and out of the nation’s economy.

When Bitcoin and other cryptocurrencies are traded across borders, governments have no visibility into those transactions. That’s a problem – particularly in countries with particularly tight foreign currency exchange regulations.

To a lesser extent, governments are concerned that cryptocurrencies impede law enforcement’s detection of crime. Cryptocurrency exchange is virtually anonymous, which means anything can be bought and sold on the black market without raising any alarms.

These three issues have prompted a number of countries to pass laws regulating cryptocurrencies already. Several more have plans in the works to regulate Bitcoin or ban cryptocurrency altogether. As historians know, there is some precedent for this.

Will Bitcoin Be Outlawed In the USA?

Billionaire hedge fund founder Ray Dalio discusses the issue of regulating and banning cryptocurrency in his new book The Changing World Order: Why Nations Succeed and Fail (due out August 2021). He points out that in 1934, the United States passed the Gold Reserve Act to prohibit individual ownership of gold.

According to then-President Roosevelt, the purpose of the law was to “protect the currency system of the United States, to provide for the better use of the monetary gold stock of the United States.” In other words, the US government decided it was not wise to permit competition between gold and money/credit to store wealth.

It’s certainly possible that current and future administrations will come to the same conclusion with regard to cryptocurrency – particularly if they choose to mirror regulations already in place elsewhere.

Bitcoin Regulated In India

India has long opposed Bitcoin, though it hadn’t suggested banning it until very recently. In January 2021, the government stated its intention to prohibit private virtual currencies in favor of developing a state-sponsored digital currency.

In March 2021, Indian officials took the next step down that path. They stated they would introduce a law that bans ownership and trading of cryptocurrencies altogether. In addition, issuing, mining, and transferring crypto-assets would be regarded as a criminal act.

The bill is expected to pass into law. When it does, India will be one of strictest countries in the world from a cryptocurrency perspective.

Current holders would have just six months to fully liquidate any cryptocurrency assets. At the end of that period, individuals found to be in possession of cryptocurrency would face legal penalties.

Is Bitcoin Banned In China?

China is known for its intense regulation of everything from the internet to the press. With that in mind, it is no surprise that it was one of the first to regulate Bitcoin and other cryptocurrencies. While Bitcoin isn’t banned in China altogether, activities related to cryptocurrency are certainly discouraged.

Chinese law doesn’t recognize cryptocurrency as money. Instead, it is considered a virtual commodity. As such, it cannot be used as currency, but Chinese citizens can continue to mine and possess it without reprisal.

It’s worth noting that China is hard at work on its own blockchain technology with the intention of introducing a Chinese digital currency.

Will Bitcoin Be The Future Currency?

Certain investors are passionate about Bitcoin investment, as it offers a hedge against inflation. Its value is independent of world markets, and it fluctuates based on an entirely separate set of factors. In nations where local currency is going through hyper-inflation, Bitcoin meets a critical need.

For example, in Venezuela, inflation increased to 350,000 percent in 2019. As of January 2021, Venezuela’s inflation is still at an unreasonably high 2,665 percent. The issue is so severe that the country’s central bank announced the introduction of a bill worth 1 million bolivars in early March.

Keep in mind that a 1 million bolivars bill is worth just $0.52. At the end of 2018, $0.52 was equivalent to just 15,000 bolivars. For Venezuelan citizens, Bitcoin is more stable than local currency, making it very appealing.

For the moment, it doesn’t appear that Bitcoin will be the future currency for everyday transactions in more stable economies. One obstacle is the fact that current blockchain technology can’t handle the volume of transactions that would occur.

However, experts in the financial world – including cryptocurrency researchers with financial giant Citigroup – think there is a reasonable chance that Bitcoin will become the preferred currency for international trading.

Some issues still have to be worked out, but the fact that legitimate financial professionals are entertaining the prospect shows how far Bitcoin has come.

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Bitcoin falls further as China cracks down on crypto-currencies

The price of Bitcoin fell below $34,000 (ВЈ24,030) for the first time in three months on Wednesday, after China imposed fresh curbs on crypto-currencies.

Beijing banned banks and payment firms from providing services related to crypto-currency transactions.

It also warned investors against speculative crypto trading on Tuesday.

It follows falls in Bitcoin of more than 10% last week after Tesla said it would no longer accept the currency.

On Wednesday afternoon, Bitcoin recovered some ground, although it was still down -10.4% at $38,131.

Meanwhile, other digital currencies such as Ether, which acts as the fuel for the Ethereum blockchain network, and Dogecoin lost as much as 22% and 24% respectively.

At the same time, Tesla shares fell more than 3% on Wall Street, possibly because of the electric carmaker’s exposure to Bitcoin.

The firm, owned by Elon Musk, still holds around $1.5bn worth of the crypto-currency.

Beijing cracks down

Crypto-currency trading has been illegal in China since 2019 in order to curb money-laundering. But people are still able to trade in currencies such as Bitcoin online, which has concerned Beijing.

On Tuesday, three state-backed organisations, including the National Internet Finance Association of China, the China Banking Association and the Payment and Clearing Association of China issued a warning on social media.

They said consumers would have no protection if they were to incur any losses from crypto-currency investment transactions.

They added that recent wild swings in crypto-currency prices «seriously violate people’s asset safety» and are disrupting the «normal economic and financial order».

Neil Wilson of Markets.com said: «China has for some time been putting pressure on the crypto space, but this marks an intensification — other countries might follow now as central banks make strides towards their own digital currencies.

«Until now, Western regulators have been pretty relaxed about Bitcoin, but this might change soon.»

Tesla snub

In March, Tesla boss Elon Musk announced unexpectedly that the electric carmaker would allow customers to buy cars using Bitcoin.

But last week, he did a U-turn and suspended vehicle purchases using Bitcoin because of environmental concerns.

His fears centre on Bitcoin mining — the energy-intensive process through which the digital currency is generated, using high-powered computers. It often relies on electricity generated with fossil fuels, particularly coal.

«We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,» Mr Musk wrote.

«Cryptocurrency is a good idea. but this cannot come at great cost to the environment.»

He said the electric carmaker did not intend to sell any of its Bitcoin and intended to reinstate crypto-currency transactions once mining shifted to using more sustainable energy sources.

Although the digital currency cannot be traded in China, more than 75% of Bitcoin mining around the world is done in China.

For anyone who has followed the crypto-currency scene for a while, the events of recent weeks are a familiar story.

Some random event — say, a tweet from Elon Musk announcing Tesla will accept crypto-currency payments — sends Bitcoin to new highs, and people begin to say it’s winning mainstream acceptance.

Then another random event happens, perhaps a change of course from the Tesla tycoon. It comes tumbling down again, and talk of it going mainstream fades into the background.

Last month, in a chatroom on Clubhouse (another phenomenon that seems to be swinging from boom to bust) I expressed some scepticism about crypto-currencies.

Up popped a senior figure from London’s thriving fintech scene: «Rory, Rory,» he chided me, «crypto is becoming an accepted asset class.»

With big City institutions taking an interest, that had a ring of truth — back in April, at least.

But this week, the weather had changed, with the Financial Times reporting «new doubts among institutional fund managers over the future of crypto-currencies as an asset class».

My mind went back to 2013, when I had first taken an interest in Bitcoin. In a report for Radio 4’s PM programme, I had bought a pizza for 0.5 BTC, a tortuous process which had not seemed worth the ВЈ30 it cost back then — of course, at today’s exchange rate, that was a ВЈ14,000 pizza.

I had also written a blog post headlined «The Bitcoin Bubble», in which I tried to mine some lessons from a period when the price of the cryptocurrency shot up from $15 to $276 and then hurtled lower again.

I ended a piece in which I compared the cryptocurrency with 17th-Century Dutch tulips or London houses in the 1980s with this thought: «Unless and until Bitcoin can be used to buy a sandwich, or be accepted by your friends when you pay them back for a restaurant meal, then it is likely to remain just a playground for geeks and gamblers.»

Eight years on, it is still virtually impossible to buy a sandwich with Bitcoin.

And why would you want to, when there’s a good chance you’ll be mocked a few years later — as I’ve been for my transaction — for giving away an asset that goes on to soar in value?

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The Last Futurist

Artificial Intelligence of Everything

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Will Bitcoin Be Banned?

With American billionaires pumping the value of Bitcoin and institutional money flowing into the digital copper as if it was gold, central banks will have to take another look at banning Bitcoin mining and trading. India and China understand this, but the rest of the world doesn’t seem to get it.

With stimulus creating a stockmarket bubble, and the Fed printing money as if there was no tomorrow, it’s a bit funny to see meme stocks and Bitcoin go up. Bitcoin crossed $60,000 this weekend. Consider one year ago it was just $5,300. This is creating the biggest pyramid ponzi scheme with artificial supply and demand we’ve ever seen in our seemingly fragile financial system.

Companies like MicroStrategy, Tesla and Square are behaving as if this is the right gamble. Will more follow? Is Crypto really the future of money, and on Mars? Well, not according to India. India will propose a law banning cryptocurrencies, fining anyone trading in the country or even holding such digital assets, a senior government official told Reuters in a potential blow to millions of investors piling into the red-hot asset class.

In a world where financial regulation is actually followed, I agree with this move. Just as I agree that with China’s digital Yuan experiment, it needs to do the same with Bitcoin in its huge territory. The ultra wealthy are “hiding” their assets in Bitcoin and it’s creating an unbalanced world of the K-shaped recovery. It’s creating major financial irregularities in even the value of the real tangible Gold.

The biggest cryptocurrency, bitcoin, has shifted from the fringes of finance towards embrace by major investors, companies and even cities. But this is also favoring the billionaire class to such an unfair extent that quite the opposite of crypto’s narrative of democratizing money or decentralizing power appears to be happening.

The India Bill appears to be one of the world’s strictest policies against cryptocurrencies. It would criminalize possession, issuance, mining, trading and transferring crypto assets, said the official, who has direct knowledge of the plan. Here is something China and India actually can agree upon. In a speculative market crypto has become hot, but the kids are not all alright on this one. Crypto has no inherent value, it’s sort of made-up. The NFT boom is a bizarre case of how this all occurs online. But reality is not a meme. Bitcoin is not real or corelated with anything besides perhaps copper. Bitcoin is manipulated however, and companies putting their corporate cash in it are just stoking the irregularity of the event.

It’s not just a market distortion like it was in 2017. If it gets any bigger it will be a major distortion in our global financial system in 2022!

Bitcoin’s second bull market looks downright criminal, from where the Last Futurist is sitting. Central banks want to digitize their fiat currencies, but they have to be careful how they do it and strictly regulate the crypto stuff floating around. While some insinuate Bitcoin could become a reserve currency, others are saying Central banks should ban it. What do you think?

Former British Parliament member Nick Boles called on central banks to ban bitcoin, in a tweet Tuesday, Feb. 9th.

“Central banks should ban the trading of it, and force anyone who holds Bitcoin and wants to use it in any transaction, to exchange it for another currency that does not have such a damaging side effect,” Boles said on Twitter.

In a debt bubble crisis, what would people actually hedge their money in? It’s not stocks, so it has to be Bitcoin, gold or crypto. This creates various loopholes to the system. The India bill would give holders of cryptocurrencies up to six months to liquidate, after which penalties will be levied, said the official, who asked not to be named as the contents of the bill are not public. This could be how the Bitcoin 2nd bull market ends. If China and India do the ban, will more countries follow? It remains to be seen. But for now Bitcoin is the pet currency of billionaires and greedy Wall Street. What an ironic fate for a generation’s storied rebel asset.

Maybe we should live in a world where the 1% can’t cheat the system. Where Silicon Valley profiteers like Jack Dorsey and Elon Musk can actually make an honest living. Square and Tesla alone are boosting the value of Bitcoin and Coinbase’s IPO will stoke it even higher. MicroStrategy has a lot of Bitcoin, it just makes you wonder. Bitcoin is the digital fool’s gold of some of the greediest people on the planet today.

Somehow an entire generation of Millennials believe in Bitcoin’s story. The crypto kids seem a bit like the meme-stock crowd, all too happy to follow Elon Musk into dodgy territory. What will history see them as though? One thing is for sure, China’s digital Yuan will likely become even more powerful than Bitcoin and China and India will ban it even as the Coinbase IPO will stoke demand for it in shady American capitalism.

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