I’m guessing 2019 will be considered by history when governments first became truly scared of losing their monopolies on printing monopoly money. – Ryan Taylor, CEO of Dash Core
The revolution of money has yet again shaken the governments worldwide. Governments are shitting their pants off [again, figuratively speaking] due to the high-pressure financial sovereignists have brought in. This time, it’s not about the stock crash, the debt crisis or the trade war; it is about boycotting monopolies, wealth-management caging and breaking out of centralized financial bondage.
Governments monopolizing the medium of wealth storage
Economics is more science than it is philosophy. From Alfred Marshall to Milon Friedman, the logic of mathematics in economy, financial sovereignty, ‘the government can’t have it all’ theories have explained for over a hundred years how competitive markets and free consumer choice are far better than government control and monopoly.
The past decades have been tough with the various financial meltdowns we’ve had globally. The belief of accelerating financial sovereignty took a back seat until the last decade when cryptocurrencies came into the picture. This is what challenged the government on their absolute governance, and the monopolistic authority over national monetary systems through the institution of basic paper money aka fiat that you and I use on a daily basis.
The government prints notes; tells you to pay in it, [charges you for that] and tells you to get paid in it [charges you for that too]. Then they tell you to trust it as the government puts its “faith” in it and when the recession comes in you know who goes down [you, obviously].
Nations like to look good; be it politically, socially or financially. One of the things they often boast about is the GDP. While it is the least accurate metric used to describe a complex system such as growth which is not even a 1:1 translation for a well-off country.
In order to have a more fiscal stimulus, governments take debts that need to be paid for in the future by borrowing newly minted money from the country. The government benefits from any devaluation caused to the currency their debt is expressed in [USD, INR, YEN, etc.]. Sad part being, people like us, the citizens who hold currencies in banks as stores of value lose our assets with the additional risk of bank defaults.
Losing control with financial freedom
Every country has its own currency and works on its own sets of principles. When Bitcoin came into this financial system, it carried weight enough to disrupt all the centralized banking channels and financial institutions that don’t let you manage your own money.
Now, this is not good news for any country’s government. Why?
Fiat is purely controlled by the government. Central banks are used to issue or destroy money out of thin air [Trump supporters please note]; it’s carried out seamlessly through the monetary policy and handles the money supply internally to deploy sound economy. The government is the one that tracks your money, keeps an eye on your savings, implies taxes on the money you make and even monitors your assets. With a non-governmental currency, you can manage your own wealth without the intervention of the government and how can they possibly lose such a control?
Bitcoin and cryptocurrencies promote the basic idea of a P2P electronic cash mechanism with no middleman involved. The underlying technology doesn’t allow you to make money from thin air or even destroy it. It has a limited supply and works on the very principles of demand and supply. It is a store of value and at all times should be treated as one.
What makes us trust in Bitcoin is what makes the government allergic to it. The transparency, anonymity, and immutability of open ledgers are hard to digest. If people start investing money in an unmonitored asset there will be issues related to capital flow and money laundering.
For that, the government needs to plan regulations around it and not against it.
Countries like China, Russia, India and more do not recognize Bitcoin as a legal tender and frankly, they don’t even need to. Bitcoin is an asset and the basic reason it was made for was to cut out a middleman who wants to monitor your wealth and charge you for it.
Governments started suppressing Bitcoin as soon as they realized the threat it imposed on their governing. Right from China’s ban on Bitcoin, to India being bearish on the crypto to fiat conversions, cryptocurrencies and their adoption have never ceased to surprise me. Building blockchain-based solutions for healthcare or using cryptocurrencies for cross-border payments it’s just a matter of time until everybody starts recognizing the true value of financial sovereignty unleashed through cryptocurrencies.