Why is Bitcoin banned by your government?

Bitcoin and cryptocurrency are revolutionary both in terms of technology and their impact on financial systems and global economies.

What started with the interest of a niche set of technology and finance enthusiasts, as a technology solution that served as an alternative to a banking system that was starting to fail. Over the span of a few years saw more and more interest from people that have seen the benefit of the new system and began to invest in it, either because it provides a financial solution that they were in need of or as an investment because of its unprecedented increase in valuation.

This meteoric rise in the adoption of Bitcoin and cryptocurrency is what has governments on edge because they are unable to cope with the unforeseen impact it has on financial systems.

As we all know governments control banks, and through them, they are able to control the flow of money. This helps them to track its movement, charge taxes and manage the economy of their country. Through banks, the government uses loans, interest rates, inflation, and deflation to facilitate this management of money and the economy. It also manages money going in and out of the country using banks as a gateway to keep the balances in check.

Apart from the government’s need to manage the economy, cryptocurrency also poses a risk to investors, and the government has a duty to protect its these investors, its citizens. Cryptocurrency is still fairly new and keeps evolving. While it was created with the best of intentions in mind, because of its decentralized nature, cryptocurrency has zero policing.  This makes it easy for nefarious entities to exploit it for personal gain through hacks and scams. The onus of policing, therefore, falls on the government who needs to have provisions in place to protect its citizens. The other risk to citizens is the volatility of the cryptocurrency market which poses a risk to uninformed investors who could be enticed by the promise of huge returns. Thus, educating citizens on cryptocurrency and providing official and trustworthy sources for buying and transacting with the currency is another critical area that the government needs to address.

Thus, while we may look in dismay at the regulation and banning of cryptocurrencies by the government, we should keep in mind that the government needs to put a hold on cryptocurrency in order to catch up and adapt to this new system in a way that guarantees that it does not disrupt the government of the country and economy in adverse ways, while also protecting its citizens.  

And while most countries are treading cautiously with heavy regulation imposed on cryptocurrency, some countries like Singapore, Switzerland and a few European nations are adopting progressive policies that could pave the way for other nations to follow. However, till the global cryptocurrency market stabilizes and regulation policy gets standardized, the safest way to maintain your cryptocurrency securely and away from government influence is to save them on offline hardware wallets like Koinlocker.