A few things need to be cleared before we understand why governments all over the world are closely aware of Bitcoin or as a matter of fact, any cryptocurrency. While a majority of citizens and a few governments are enjoying the pros of blockchain and Bitcoin, most of the governments on a global scale are wary of cryptocurrency, and somewhat afraid of it too. Let us understand the reasons of why governments are keeping a close eye on bitcoin.
Bitcoin is the first of its kind peer-to-peer and decentralized payment network. It established the notion of crypto-trade being possible by its users with no intermediary middleman or central authority. The ease of access and a growing value are two reasons why Bitcoin has spread rapidly. But the fact that cryptocurrencies out there lacks central authority is what primarily interests both laymen and governments. Let us try to dig into this fear from the governments’ side and also briefly discuss why certain governments have chosen crypto to be a viable option for their governance.
Who Wants to Let go of Control?
Fiat currencies run on certain government-regulated values. You believe in your traditional currency bill because your government simply asks you to. But it has been long seen that these currencies do not have any backing by any kind of tangible assets. You get nothing in exchange for these currencies directly from your government.
Rather, it is constantly enjoying the power to issue or destroy money using its policies, tracking the movement of your monetary assets, and collecting taxes on it. All this control is lost when a non-government body creates its currency.
What Happens to the Public Revenues and Fiscal Policies?
The government controlling currency has a positive impact when it comes to a country’s fiscal policies, business environment, and crime control. The government regulates sectors like investment opportunities, jobs, spendings, inflation, and recession through its currency regulations. All of this would not be systematically possible without traditional centralized currency, thus making governments take a keen interest in this particular issue.
There are also instances where certain crypto-friendly governments are imposing taxes on cryptocurrencies to generate revenues. Nonetheless, your government is interested in what you’re doing with your crypto-money, anyway. And therefore a lot of government bodies in several countries have either banned them or kept them hanging with their decision.
What if Banks Become Irrelevant?
We do know that bitcoins are already giving the central bodies quite the run for their money. And that is also why a lot of banks and governments had to call in when it came to deciding what needs to be done with cryptocurrencies.
And now that a lot of businesses have started to use cryptocurrencies as a method of payment, in a few years, banks might just become irrelevant in the long run. Though it may seem fancy when we say decentralized money, there are two sides to every story, right? All the facts regarding safety, security, protection, trust, quick settlements, low exchange rates, and efficacy are there, but what will happen if, in our given system, banks cease to exist?
In a given setup of crypto-oriented states, there is still a high chance that your information is hacked. For an instance, whom will you contact if your mortgage payment somehow gets hacked, if not your bank? What if there is a failure in the transfer of assets? Do you know the top risks in banking and financial services industry? What if there is a technical glitch?
What will happen to the jobs of all those working in the banking sector, and subsequently the bank service fees that bring in revenues? Nobody would need banks if everybody starts to use Bitcoin.
These are some of the reasons why Governments are keeping themselves completely aware of the rise of Bitcoin and other cryptocurrencies, on a global scale. And that has raised a lot of questions in the thoughts of people who have been meaning to purchase bitcoins. Let us also briefly see why certain blockchain-based governments are aware of Crypto but in a good sense.
● A relationship of trust with its citizens
● Protection of personal and sensitive data
● A cut down on labour-intensive processes
● A reduction on sky-rocketing costs related to accountability management
● A possible reduction in corruption and monetary abuse
● Secured monetary environment for business or other investments
Conclusion
The bottom line is that Cryptocurrencies are growing every day. On one hand, it means believing in a complex system that you may not understand. On the other hand, the total possibility of it taking over the traditional idea of money. Whatever it is, you may first gather more detailed knowledge about Bitcoin or cryptocurrencies as a whole by visiting the Bitcoin Prime website. Here you will find every information required for knowing the first things that you have been thinking about bitcoins. So, don’t wait further and get going to the website!
