Governments and banks are losing control

As we are still waiting for the end of the correction cycle and for the beginning of a steady bull period in the crypto-market, there is something definitely positive to talk about.

One of the primary objectives of creating Bitcoin was to get in the way of control of governments and traditional financial institutions. And there’s solid evidence that it’s working because, by using Bitcoin and other crypto-currencies it has become easier than ever to move money across borders.

This potential in Bitcoin to circumvent government-imposed economic restrictions “could have significant implications across the world, upending currency wars, hampering efforts to manage crises and challenging traditional ideas of economic development – all of which frequently include restrictions on taking money abroad”, as the Telegraph says.

The best recent example is, of course, Venezuela’s launch of its own national crypto-currency, Petro. US President Donald Trump went as far as to issue a prohibition against the Venezuelan crypto-currency. He ordered US Treasury Secretary Steven Mnuchin to enforce this ban by issuing any necessary regulations. While measures like that would have worked before the crypto era, now it’s a different story. In spite of all the restrictions and sanctions, according to data from the Venezuela’s Superintendent of Crypto-currency and Related Activities, more than 80,000 individuals from 127 countries have invested in Venezuela’s crypto-currency and raised more than $5 billion in funds.

Restrictions haven’t proved effective enough because certain aspects of using crypto-currencies is outside the control of governments and banks. And we are not talking about cross-border finances only. Governments’ control within their country’s own borders are also jeopardized. The Royal Economic Society’s Gina Pieters explained to The Telegraph that if governments cannot maintain control over crypto-currencies — Bitcoin will begin “eroding a country’s ability to control their own exchange rates.”



Zsolt Balló