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Does Bitcoin Require the Governments’ Control?

by Contributing Author

Some people argue that almost half of all Bitcoin trade revolves around criminal activity. And these rumors have prompted some governments to act on this virtual currency. However, these rumors have not hindered people and institutions from investing in Bitcoin.

All kinds of investors are considering investing in this virtual currency due to its rocketing prices. The increasing popularity, adoption, and acceptance of this digital currency are also why many people want to invest in it. However, regulators have a different view of this virtual currency. Some feel that Bitcoin has financial risks and criminal activities happening around it that need some regulations.

For this reason, countries like Australia are implementing laws for regulating and monitoring digital currency trades closely. On the other hand, South Korea and China have banned cryptocurrency trading.

Bitcoin’s Price Volatility

Bitcoin’s remarkable growth in terms of value has driven most people’s interest in virtual currencies. In 2010, Bitcoin’s value was 6 US cents. In October 2016, this virtual currency’s value was beyond %$600. As of December 2017, Bitcoin’s price was $17,000, and this growth continued until 2020, when the price hit the $60,000 mark.

Despite this unprecedented growth, financial regulators and some investment advisors have always warned investors to exercise caution. That’s primarily because of the volatile nature of this virtual currency. However, some people take advantage of this volatility to profit from trading bitcoin on platforms like the British Bitcoin Profit. Ideally, these platforms allow people to purchase this virtual currency using fiat money at a low value and sell it once the price increases for a profit.

Most people find the speculative nature of the crypto trade fascinating. And this has led to the emergency of a thriving cryptocurrency trading industry. What’s more, most people love Bitcoin because it provides a convenient and efficient electronic payment method.

Bitcoin and Government Regulations

Most experts argue that most governments are trying to catch up with technology ahead of them to develop regulatory safeguards. The underlying protocols of cryptocurrencies like Bitcoin and decentralized basis don’t require any user identification. Consequently, Bitcoin and other virtual currencies bypass financial exchanges and institutions that governments regulate. And this presents severe challenges for financial regulators.

Most governments argue that they want to regulate Bitcoin because investors currently have little to hold on to if things go wrong. And this has happened severally with significant drops in Bitcoin’s prices. The focus of most governments now is on catching up to provide more consumer protection while ensuring that blockchain and digital currencies don’t create a tax revenue leakage area.

Emerging Bitcoin’s Legal Framework and Restrictions

Some governments are developing legal frameworks for regulating Bitcoin. For instance, Australia passed legislation in 2017 requiring crypto exchanges to register with the Australian Transaction Reports and Analysis Center. This law also requires Bitcoin exchanges to verify customers, identify them, record transactions, establish anti-money laundering programs, and report suspicious activities.

Some governments have banned Bitcoin and other virtual currencies completely. For instance, the South Korean and Chinese governments have banned cryptocurrency trading. These are some of the countries with significant crypto trading activities after the US and Japan.

Moving Forward

Bitcoin will most likely keep growing in acceptance, adoption, and usage despite these challenges. That’s because most people have faith in Bitcoin and the technology behind it. Countries like El Salvador have announced their intention to make Bitcoin a legal tender. More merchants are also taking Bitcoin payments. The number of people purchasing Bitcoin through crypto exchanges and using it as value storage is also increasing. All these facts hint at a bright future for this virtual currency.

Since Satoshi Nakamoto designed Bitcoin as a virtual currency free of governments’ interference, controlling it won’t be easy. That’s because this digital currency allows people to make partially anonymous transactions.

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