cryptocurrencies are so good, so why are so many governments don’t like it?

[ShadowCrypto]

Let’s start this discussion again.
we know that cryptocurrencies are so good, so why are so many governments don’t like it?
If people use bitcoins, instead of the state currency, the government can not “tax” them or give a “value” through the inflation “tax”


The key to its success is something called the blockchain. The blockchain is a means of solving the double-spending problem: which is that because the currency is digital it is open to being copied and spent more than once – something banks stop with physical currency.

However, the blockchain acts as a digital ledger, whereby every single transaction (called a block) is securely linked together using cryptography and encryption. It’s verifiable, available to everyone who owns Bitcoin and is immune to fraud and hacking – unlike centralised banks.

It enables one digital wallet (that can be stored on a phone) to directly connect with another securely and process a transaction.

If virtual currencies are so good, why are so many governments with the flea behind their ears? The Chinese government is embarking on a crusade against bitcoin. In India, the situation is not much different. There are other examples. Because?

The potential benefits of crypto-coins are real. Governments around the world are full of debt. Many of them will hardly be paid. Brazil( My country) is not an isolated case. Europe has a very serious social security problem. Governments promised worlds and funds. But their populations are aging. And, at the same time, fertility is falling. The account will not close.

What does a government do when it does not have the money to pay? Sell ​​tomorrow’s lunch to pay for today’s dinner. Some governments have been able to play this game for decades. So the scheme is so attractive.

For governments that manage to issue debt in their own currency, gambling is even more interesting. If or when investors are unwilling to hold public debt securities in the portfolio until their maturity, these governments that take debt in their own currency may call for creative mechanisms to “monetize” debt.

To “monetize” public debt, the key is to give liquidity and certainty attributes that equate government bonds with monetary instruments. For example, governments do this with funds from the Money Market. The key is always to find ways to get people to use government bonds as “money.”

But there comes a time when lenders lose confidence and stop rolling over debt. What’s up?


Here governments can issue money directly. They can finance their debt with monetary printing. It’s a default of a different kind. The trick is inflation. Today, you have $ 100 in your wallet. With that money, buy ten packets of a wafer. If the price of the wafer package doubles, you will still have $ 100 in the wallet. But your buying power will fall by half.

What if you have a government debt bond instead of a $ 100 bill (or deposit)? In developed countries, government debt is not indexed. So inflation works, solve the problem of the Treasury.

But in others (as in Brazil), there may be indexation. Then the government bond will pay inflation for the period + x%. How to pay off this debt? It is only passing a law changing the rule of correction of the titles. Or make a compulsory loan. Or freeze deposits. Or make a board. There will always be a cunning economist and a good talk advocate to wrap the fish. And it’s not just in Brazil!

This is where the magic of cryptos begins to function. If people use bitcoins, instead of the state currency, the government can not “tax” them or give a “default” through the inflation “tax”. State tricks do not work with bitcoin.

This is the first reason why having crypto-coins may be a good idea: it is insurance against government insolvency. Since the world is a world, governments break down periodically (especially after losing a war – more on the subject, below). Having crypto (especially a bitcoin type crypto), as well as having physical gold, is insurance against state insolvency.

But the advantages of cryptos exist not only for moments of catastrophe or crisis. Cryptos have advantages also in times of normality. They are, in principle, safer and cheaper than other forms of payment.

Crypto operations cannot be undone. You are not at risk of having your credit card cloned. The transactions are settled immediately in the blockchain. There are no fees. And it is possible to implement smart contracts schemes that better lubricate human collaboration. Wonderful!

There is more: today there are more than 2 billion people with access to the internet or smartphones. And the number just grows. The advantages of crypto-coins are then extended to all this sea of ​​people! And it is possible to include – banking, bring into the 21st century – an even larger contingent of people. Is not it great?

In the view of governments, it may not be. There are four main challenges: monetary policy, taxation, exchange, and systemic risk.

1 –

Monetary policy. Without a national currency, in times of crisis, the government can not finance its debt via monetary printing. Imagine a farm minister from a country where the money is lacking for everything. If things get too tight, there’s only one way: to get the mint gang to work … But if people’s savings are in bitcoin, that old technique will not work!

In case of war, the impossibility of using monetary printing can have a dramatic dimension. Historically, warring governments have had to print money because it is never possible to raise taxation too quickly in too short a time. It is good to sow peace in the world. But from the point of view of national states, monetary printing has always been seen as a dimension of national sovereignty to deal with external aggression.

2-

Taxation. Modern governments are brutal spenders. You may think this is good – after all, the state of social well-being is expensive but it delivers health, education, transportation … Well, in Brazil it’s not quite like that. In international comparison, our state spends a lot, and it spends very badly. But let us leave this Brazilian “detail” aside. The fact is that governments of social welfare are expensive.

Well, how to pay the bill? A party may eventually be thrown into the lap of future generations via state indebtedness. But the bulk has to come from today’s taxation. It is here that the crypto-coins put the rulers of hairs on their feet. Crypto-coins can make it difficult for state taxation. Mainly because they can be used to launder money.

Post image
Some say that this type of problem can be remedied with measures such as those recently adopted by the Federal Revenue Service. Globally, the Libra of Facebook, when it comes to work, will have to facilitate the tracking of the identity of the holders of Libras. Will it work? Can be. Time will tell. But the fact is that governments are animals hungry for people’s resources. It’s hard to hold them.

3 –

Exchange. The exchange rate, after the basic interest, is the main price in an economy. To value it, devalue it, revalue it, this is the breadwinner of many government economists around the world. (A joke says that the exchange was invented to humiliate economists because controlling it and predicting its fluctuations is so difficult.) But the fact is that the implementation of all these challenging activities is easier as long as the state currency is used by all. What if she is not?

Notice that in Brazil we have exchange controls. It is no longer the madness of the military time, when even to buy dollars to go to Bariloche with the family on vacation the Brazilian citizen had to make guts to buy the rationed currency … And everyone ended up in a doleiro. Things have changed. But there are still various controls and barriers. Will, the government gives them up?

4 –

Systemic risk. This problem is more subtle and the analysis depends on the type of cryptocurrency. Think of the Libra (in the case of bitcoin the analysis would be quite different). This is a stable coin managed by Facebook. From what has been announced, the Pound will work with full ballast. That is, Facebook will create a Pound only when it receives the corresponding state currency. Very good.

But the problem is that the settlement of Libras operations will have to be done through digital wallets. Will these digital wallets work like banks? Will they resolve to give credit based on the floating of deposits received? If this happens, the systemic risk focus that is on banks today will simply migrate to digital wallets. What if digital wallets break: who will bail them out? The Seventh Cavalry?


Source: My official steemit and Website.
http://mundodascriptos.online/index.php/2019/08/28/we-know-that-cryptocurrencies-are-so-good-so-why-are-so-many-governments-dont-like-it/
https://steemit.com/steemleo/@phabulu/we-know-that-cryptocurrencies-are-so-good-so-why-are-so-many-governments-don-t-like-it

[Fenix]

The topic is good, but there is too much text and hardly anyone will read it to the end.
As for cryptocurrency, it is really good for people, not for governments. It's not even that it cannot recover taxes from activities in cryptocurrency. Such taxes are successfully applied in Japan and other countries. The government cannot control a decentralized cryptocurrency and this is the most important thing.

[Abusadeeq6]

many governments don"t like cryptocurrency due to its decentraalize nature and they cant be able to control. if they will implement cryptocurrency, how ill they be able to collect taxes and the currency will depreciate too

[Delgboke]

In my own opinion based on the issue of government not liking cryptocurrency despite how good it is,  I can say that most of the decision making body don't really want some people to have money more than them. That's why they dont like cryptocurrency.

[pelana vreo]

In my country, cryptocurrency cannot be used for payments, but the government does not forbid people to have Bitcoin or altcoin for investment.

The government has regulations that they cannot change quickly, traditional banks have many problems such as transparency of transactions between fellow bank accounts and the government still needs funds from traditional banks for every infrastructure development project as then banks will become guarantors when they need money.

therefore the government will always say, crypto cannot be used for payment due to fluctuating prices, but they will continue to recognize the blockchain as a very good technology for recording data systems of all transactions that can be accessed by everyone around the world

[trauchot]

We all know why many governments do not want to legalize cryptocurrencies, namely because cryptocurrency transactions are not tracked and too much black money goes through cryptocurrencies, but maybe in future governments will do something with it and will find ways to deal with dirty money.

[BINAPEX]

The reason government is not crazy about crypto is that it can't be controlled. Anyone can transfer any amount of money anonymosly. And there is nothing they can do about it.

[comer]

The government can't collect taxes because of the decentralized operation. Further, many says crypto currency can be use for illegal activities. Whatever it is, government is not really a big fan of this system.

The adoption was not that widely spread all over the globe and still many people don't know the existence of cryptocurrency. Maybe, time will come things will turn differently and government will use block chain.

[masterrex]

Let’s start this discussion again.
we know that cryptocurrencies are so good, so why are so many governments don’t like it?
If people use bitcoins, instead of the state currency, the government can not “tax” them or give a “value” through the inflation “tax”


The key to its success is something called the blockchain. The blockchain is a means of solving the double-spending problem: which is that because the currency is digital it is open to being copied and spent more than once – something banks stop with physical currency.

However, the blockchain acts as a digital ledger, whereby every single transaction (called a block) is securely linked together using cryptography and encryption. It’s verifiable, available to everyone who owns Bitcoin and is immune to fraud and hacking – unlike centralised banks.

It enables one digital wallet (that can be stored on a phone) to directly connect with another securely and process a transaction.

If virtual currencies are so good, why are so many governments with the flea behind their ears? The Chinese government is embarking on a crusade against bitcoin. In India, the situation is not much different. There are other examples. Because?

The potential benefits of crypto-coins are real. Governments around the world are full of debt. Many of them will hardly be paid. Brazil( My country) is not an isolated case. Europe has a very serious social security problem. Governments promised worlds and funds. But their populations are aging. And, at the same time, fertility is falling. The account will not close.

What does a government do when it does not have the money to pay? Sell ​​tomorrow’s lunch to pay for today’s dinner. Some governments have been able to play this game for decades. So the scheme is so attractive.

For governments that manage to issue debt in their own currency, gambling is even more interesting. If or when investors are unwilling to hold public debt securities in the portfolio until their maturity, these governments that take debt in their own currency may call for creative mechanisms to “monetize” debt.

To “monetize” public debt, the key is to give liquidity and certainty attributes that equate government bonds with monetary instruments. For example, governments do this with funds from the Money Market. The key is always to find ways to get people to use government bonds as “money.”

But there comes a time when lenders lose confidence and stop rolling over debt. What’s up?


Here governments can issue money directly. They can finance their debt with monetary printing. It’s a default of a different kind. The trick is inflation. Today, you have $ 100 in your wallet. With that money, buy ten packets of a wafer. If the price of the wafer package doubles, you will still have $ 100 in the wallet. But your buying power will fall by half.

What if you have a government debt bond instead of a $ 100 bill (or deposit)? In developed countries, government debt is not indexed. So inflation works, solve the problem of the Treasury.

But in others (as in Brazil), there may be indexation. Then the government bond will pay inflation for the period + x%. How to pay off this debt? It is only passing a law changing the rule of correction of the titles. Or make a compulsory loan. Or freeze deposits. Or make a board. There will always be a cunning economist and a good talk advocate to wrap the fish. And it’s not just in Brazil!

This is where the magic of cryptos begins to function. If people use bitcoins, instead of the state currency, the government can not “tax” them or give a “default” through the inflation “tax”. State tricks do not work with bitcoin.

This is the first reason why having crypto-coins may be a good idea: it is insurance against government insolvency. Since the world is a world, governments break down periodically (especially after losing a war – more on the subject, below). Having crypto (especially a bitcoin type crypto), as well as having physical gold, is insurance against state insolvency.

But the advantages of cryptos exist not only for moments of catastrophe or crisis. Cryptos have advantages also in times of normality. They are, in principle, safer and cheaper than other forms of payment.

Crypto operations cannot be undone. You are not at risk of having your credit card cloned. The transactions are settled immediately in the blockchain. There are no fees. And it is possible to implement smart contracts schemes that better lubricate human collaboration. Wonderful!

There is more: today there are more than 2 billion people with access to the internet or smartphones. And the number just grows. The advantages of crypto-coins are then extended to all this sea of ​​people! And it is possible to include – banking, bring into the 21st century – an even larger contingent of people. Is not it great?

In the view of governments, it may not be. There are four main challenges: monetary policy, taxation, exchange, and systemic risk.

1 –

Monetary policy. Without a national currency, in times of crisis, the government can not finance its debt via monetary printing. Imagine a farm minister from a country where the money is lacking for everything. If things get too tight, there’s only one way: to get the mint gang to work … But if people’s savings are in bitcoin, that old technique will not work!

In case of war, the impossibility of using monetary printing can have a dramatic dimension. Historically, warring governments have had to print money because it is never possible to raise taxation too quickly in too short a time. It is good to sow peace in the world. But from the point of view of national states, monetary printing has always been seen as a dimension of national sovereignty to deal with external aggression.

2-

Taxation. Modern governments are brutal spenders. You may think this is good – after all, the state of social well-being is expensive but it delivers health, education, transportation … Well, in Brazil it’s not quite like that. In international comparison, our state spends a lot, and it spends very badly. But let us leave this Brazilian “detail” aside. The fact is that governments of social welfare are expensive.

Well, how to pay the bill? A party may eventually be thrown into the lap of future generations via state indebtedness. But the bulk has to come from today’s taxation. It is here that the crypto-coins put the rulers of hairs on their feet. Crypto-coins can make it difficult for state taxation. Mainly because they can be used to launder money.

Post image
Some say that this type of problem can be remedied with measures such as those recently adopted by the Federal Revenue Service. Globally, the Libra of Facebook, when it comes to work, will have to facilitate the tracking of the identity of the holders of Libras. Will it work? Can be. Time will tell. But the fact is that governments are animals hungry for people’s resources. It’s hard to hold them.

3 –

Exchange. The exchange rate, after the basic interest, is the main price in an economy. To value it, devalue it, revalue it, this is the breadwinner of many government economists around the world. (A joke says that the exchange was invented to humiliate economists because controlling it and predicting its fluctuations is so difficult.) But the fact is that the implementation of all these challenging activities is easier as long as the state currency is used by all. What if she is not?

Notice that in Brazil we have exchange controls. It is no longer the madness of the military time, when even to buy dollars to go to Bariloche with the family on vacation the Brazilian citizen had to make guts to buy the rationed currency … And everyone ended up in a doleiro. Things have changed. But there are still various controls and barriers. Will, the government gives them up?

4 –

Systemic risk. This problem is more subtle and the analysis depends on the type of cryptocurrency. Think of the Libra (in the case of bitcoin the analysis would be quite different). This is a stable coin managed by Facebook. From what has been announced, the Pound will work with full ballast. That is, Facebook will create a Pound only when it receives the corresponding state currency. Very good.

But the problem is that the settlement of Libras operations will have to be done through digital wallets. Will these digital wallets work like banks? Will they resolve to give credit based on the floating of deposits received? If this happens, the systemic risk focus that is on banks today will simply migrate to digital wallets. What if digital wallets break: who will bail them out? The Seventh Cavalry?


Source: My official steemit and Website.
http://mundodascriptos.online/index.php/2019/08/28/we-know-that-cryptocurrencies-are-so-good-so-why-are-so-many-governments-dont-like-it/
https://steemit.com/steemleo/@phabulu/we-know-that-cryptocurrencies-are-so-good-so-why-are-so-many-governments-don-t-like-it

The only good thing about cryptocurrency is the technology and its application, But still theres so many flaws in the crypto industry that needs to be solve before it was accepted globally I think thats  the mean reason why other governments are againts the unregulated cryptocurrency related business, including those written reasons above.

[Cutter Cute]

The only good thing about cryptocurrency is the technology and its application, But still theres so many flaws in the crypto industry that needs to be solve before it was accepted globally I think thats  the mean reason why other governments are againts the unregulated cryptocurrency related business, including those written reasons above.

The system that the bank has is weaker than crypto, I say this because there are some big banks that go bankrupt but not published to the public media, the government has many members who can regulate the country's financial system and I'm sure many members who want to get benefits during their tenure by doing corruption in several new projects.

[alltalk]

The governments have several reasons to not legalize or don't like cryptocurrencies. Some governments don't want to have high risks with the volatility and anonymity of crypto. Others think cryptocurrencies may threaten national finance or be the media for money laundering. While the rest may have regulations that cannot allow crypto to be adopted in a country. 

[SonyChristopher]

The essence of that is that every bank is state-owned / government-owned, because every country has its own currency.
Cryptocurrency is very influential in the use of fiat money. Cryptocurrency can be saved without going through intermediaries such as banks, provided that having an internet connection cryptocurrency can be transferred. Very true if cryptocurrency is a barrier to state taxes, and an economic obstacle for people who have banks, but it is useful for ordinary people.

[LogiC]

Government isn't really dont like crypto, its just that taxation cannot be imposed like what the government doing on some financial institution such as business and bank. There are laws that stipulated on the government regarding this, hence on crypto it is not yet build that's why they are very hesitant. Also, crypto created in a decentralized manner so I think there will be a huge dispute regarding this matter and will take time to process.

[Fenix]

The reason government is not crazy about crypto is that it can't be controlled. Anyone can transfer any amount of money anonymosly. And there is nothing they can do about it.

Yes, in general this is true. However, a decentralized cryptocurrency also has very great volatility and can in no way be connected with the economy of any state. Therefore, cryptocurrency can go in society only along with the national money of states. Cryptocurrency so far is good only for people, but not for the state. It continues to develop rapidly and so far no one can say where its further development will lead.

[alltalk]

~snip~

I think there is no problem with taxation, it still can be applied and the user identity must be detected in a certain way. The problems are likely in regulation, volatility, and possible risks to happen like money-laundering. Some countries have the regulation to legalize only their national currency for payment tools. Moreover, crypto coins are very volatile, it is not really safe to use for payment purposes.