Bitcoin represents an alternative to the world's regular money system as a borderless and stateless digital method of making payments and purchasing goods and services (nefarious or otherwise). However, the $1 trillion question (the current amount of money invested in Bitcoin) on everyone's lips is whether the government will outlaw the cryptocurrency in the future.
A prohibition on possession and trading is possible, but there is almost no way to track compliance with any law enacted to curb the activity. Governments would have to go to great lengths to accomplish this, with the only sure ways being to cut off access to the internet or electricity, both of which are non-starters. Start your trading journey with confidence by using a trusted trading platform like crypto trader.
China attempted to ban mining in 2021, when it was the world's most crucial Bitcoin prospecting location, causing a brief market panic. The miners emigrated, and some American states welcomed them warmly.
However, a ban in the United States could be disastrous for Bitcoin because it is home to the world's largest capital markets. The EU is currently preparing a large package of "crypto-regulation" measures to unify the rules across Europe; details are still in work and could take up to a year to finalize.
Bans Are Ineffective And Maybe Impossible
Even if the government banned Bitcoin, it would be ineffective. During Prohibition, the United States government prohibited the sale of alcoholic beverages, but liquor was widely available. Bitcoin isn't a physical thing, so how will governments seize it? It is challenging to prohibit people from using code on the internet. China tried to ban Facebook, but Chinese people still use VPNs to access the site. There are doubts about the legality of any potential Bitcoin ban in the United States because Bitcoin is essentially code, which could be a protected category of free speech under the First Amendment.
In A Multipolar World, Coordination Is Inapplicable
A ban would be more effective if all countries coordinated and implemented it simultaneously. But, in the fractious world of geopolitics, what are the chances of global coordination? The UK is too preoccupied with arguing with the EU, and the US is too obsessed with claiming with China for them all to clamp down on Bitcoin simultaneously. Marko Papic's multipolar worldview, as outlined in his recent book "Geopolitical Alpha," reinforced my belief that the geopolitical conditions required for a globally coordinated crackdown on Bitcoin do not exist.
Regulators Are Warming Up To The Technology
Moving from macro to micro, are governments willing to destroy Bitcoin businesses within their borders? When we consider the jobs at Coinbase, Gemini, and other companies, we can see that Bitcoin is becoming entrenched, especially in the world's largest economy. Most countries have exchanges, corporations have Bitcoin on their balance sheets, the Chicago Mercantile Exchange offers Bitcoin futures, and members of the United States Congress outright support BTC. You can also quickly warm up to the technology through a reliable trading platform. Ex-US regulators have recently joined Binance and BlockFi, highlighting a growing relationship between Bitcoin-related businesses and the government. Many politicians are likely to own Bitcoin themselves.
Millennials May Require Financial Power
Most countries are taking a wait-and-see approach because they are unsure how to approach Bitcoin technology. They expect innovation, jobs, and economic growth, arguing that the industry is too small to pose a real threat. However, the longer they wait, the more entrenched the industry becomes, and negative regulation becomes less likely. This factor becomes more significant when one considers the rise of millennials to economic and political prominence.
Maybe You Need Bitcoin More Than You Believe
Although ineffective and unlikely, a Bitcoin ban is still a possibility. On the other hand, governments that prohibit new technologies tend to take on a particular personality. Such governments, such as those in China and Venezuela, tend to be more authoritarian and less supportive of individual liberties. People in these countries require Bitcoin the most. Venezuelans don't care what the government says. Instead, they need Bitcoin to avoid hyperinflation. And this trend might spread to other developing countries once people learn about Bitcoin and its benefits.