GET IN MORE or MOVE AWAY:WHY GOVERNMENTS SCARE US ABOUT CRYPTO?
The Unstoppable Rise of Cryptocurrencies: Governments' FUD Tactics and the Future of Money
In the realm of cryptocurrencies, recent actions by Washington, spearheaded by SEC Director Gary Gensler, seem to reflect a classic Fear, Uncertainty, and Doubt (FUD) strategy. Accusing major exchanges like Coinbase and Binance of unauthorized securities trading has set the stage for increased regulatory scrutiny. However, the narrative takes a questionable turn as the SEC hints at a hands-off approach, avoiding specific rules while subtly hindering the ecosystem's growth.
The classification of cryptocurrencies as securities rather than commodities, especially for established ones like Bitcoin and Ethereum, appears misguided. The focus on control over exchanges intensifies, with a threefold increase in information requests to Coinbase over the last three years. Governments, led by the U.S., aim to broadcast their surveillance, creating a sense of scrutiny for users who transact on these platforms.
Cryptocurrency investors are bombarded with conflicting messages, such as warnings to abandon non-Bitcoin trading and cautions that investing in cryptocurrencies carries the risk of losing everything. The motives behind these messages become clearer: governments seek to manage the risks associated with this decentralized financial landscape.
The overarching push to assimilate cryptocurrencies into the traditional financial framework revolves around control. As the appeal of redefining money to escape governmental and central bank influence grows, authorities are fighting back by sowing doubt and raising entry barriers through the introduction of Central Bank Digital Currencies (CBDCs). While initially positioned as safer alternatives due to government backing, CBDCs, in reality, offer increased control, allowing authorities to manipulate currency expiration dates to influence economic activity.
Cryptocurrencies, by their nature, resist control. Despite onboarding processes with Know Your Customer (KYC) rules, the ability to buy and sell them freely makes tracking transactions challenging. Cryptocurrency wallets, private and secure, further complicate surveillance efforts. Governments lose not only the ability to issue money at will but also struggle to monitor movement, resorting to treating cryptocurrencies primarily as investments and requiring declarations.
The future widespread use of cryptocurrencies hinges on their perceived value proposition—a currency free from centralized control. The ongoing adoption process faces governmental resistance, manifesting in fear-inducing tactics. However, as cryptocurrencies like Bitcoin and Ethereum continue to gain traction, governments may realize that the rules have changed. In the shift from trusting printed currencies to embracing code, as expressed by the slogan "in code we trust," the call to keep governments and central banks away from our money becomes more resounding—a glimpse into the future of finance.
