Jean Galea

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Can Governments Ban Bitcoin?

Published: December 11, 2020Leave a Comment

In my opinion, as of 2020, one of the biggest risks of Bitcoin remains the possibility of governments around the world banning Bitcoin in some way or another.

As far back as 2015 there were already rumors of big countries and the EU planning on banning Bitcoin, but nothing has come out of that.

In 2020, we have seen governments and banks becoming even more controlling of their citizens the world over.

As has been the case throughout history, bar a few protests here and there, ultimately the majority of citizens abide by their governments’ requests, be it the compulsory wearing of masks, lockdowns or the confiscation of all their gold holdings. Governments and authorities have always been able to scare people successfully, as very few people have the time and inclination to think about things deeply and consider the real repercussions of certain government actions, especially those that on the surface appear to make sense.

Again, 2020 has been a great clown show and provided us with lots of lessons. Here’s an example of critical thinking, discussing the harms of lockdown.

With the backdrop of 2020 it makes sense for crypto holders to take a serious look at the possibility of governments taking action to maintain control of the monetary system. The fiat currency system is 100% controlled by governments, while the stock market is strongly influenced by government buying and selling as well as other closely-related big players.

Crypto and in particular Bitcoin have been running mostly outside the control of governments, but now that the market cap of Bitcoin is getting bigger and bigger, it is attracting the attention of institutional investors and public companies. Both of these entities are much closer to governments in the chain of power than your typical retail investor.

It, therefore, makes sense that governments would get worried to see public companies like Microstrategy go all-in on Bitcoin, or PayPal to offer its users the ability to buy crypto.

So are the governments currently showing any menace? They are definitely showing signs of concern, although one of the major problems is their problem to understand even the basic fundamentals of how crypto works. In the U.S. we’ve seen the proposed STABLE Act, which can be seen as an attack on stablecoins.

We’ve also seen the threat to self-custodial wallets in the U.S. although nothing has been set in stone yet.

In the U.K., the FCA banned the sale of crypto-derivatives to retail consumers, as from 6 January 2021. Yet another case of a nanny state applying a blanket ban on all its citizens with the tagline being that it will save the uninformed from making bad financial decisions. Even then, however, UK citizens can easily bypass the ban by using non-UK based exchanges.

Ultimately, while I see more regulation encroaching on crypto, it is a bit of a stretch to go from regulating to outright banning crypto. Having publicly traded companies and big players in the investments space act favorably towards Bitcoin makes such an eventuality even more unlikely.

What are your thoughts on the subject? I’m still thinking about the topic and would welcome your ideas. I will develop this article further based on my research and further opinions.

Filed under: Cryptoassets, Money & Investing

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About Jean Galea

Jean Galea is a dad, amateur padel player, host of the Mastermind.fm podcast, investor and entrepreneur.

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Jean Galea

Investor. Dad. Global Citizen. Padel Player.

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