About a dozen countries have already ‘banned’ trading using cryptocurrencies. China, India, and South Korea are leading the pack in this emerging battlefront. Let us look at whether banning is even a possibility. All cryptocurrencies follow one protocol, unregulated and decentralized. How can authorities claim to ban what is not yet within their purview? Well, they have tried, and some of the reasons given are here.

They Don’t Know What It Is

Governments want to be ahead of information. From antiquity, authorities hate being in the dark. How do they keep up with what the people are doing if they don’t know what it is? Bitcoin, Litecoin, Ethereum and other leaders in the cryptocurrency world use blockchain technology. Only a few countries have white papers about the technology, and only a handful of people in the world can tell you exhaustively what exactly it is.

Governments are in this position, and because it is an uncomfortable situation for them, some are considering regulating it, but they don’t even have concrete ideas how to do it. So, they decide to get rid of it altogether. Unfortunately, even in countries such as China that have the systems and institutions to eliminate crypto trading, they have no control of forex sites accessible through VPN and VPS.

Lack of Regulation

To regulate, you ought to have legal mechanisms to facilitate the same. Crypto technologies are highly advanced. Legislators drive the mood of the regulatory mechanisms. If they have little information about something, they have little incentive to lend a hand. Only governments want to regulate. Politicians across the globe tend to harbor symbiotic relationships with ‘lawless’ havens. Perhaps, they are not enthusiastic about sponsoring legislation.

Anything can happen in a deregulated market. As seen in pre-Dodd-Frank regulation, the danger was lurking at the corner. So, some governments are exercising caution instead of waiting for the ‘reckoning.’ However, Mark Dukas thinks that this is misplaced caution. According to him, cryptocurrencies are anchored in one of the most stable technologies in the world.

Seen As a Hotbed of Cybercrime

In an area where the authorities cannot peep occasionally, it becomes a problem to trace terror cells and their funding methods. While this remains a huge concern for a deregulated market, governments may have to look for alternative ways to stop funding or terrorism apart from following the money. Countries are concerned that cybercrime will be bred, as crypto trading ensures that the authorities do not know anything. The possibility of getting away with anything is real.

Mark Dukas Charlotte is however optimistic about how cryptocurrencies can overcome this challenge in the future. It depends on how blockchain technology will evolve over the years.

Perceived Threat to Financial Stability

A centralized system means a sane environment where stability and reliability exist. Banks and central banks rely on information to set out monetary and fiscal policies that affect people. They determine how people obtain loan facilities; interest charged; the amount of money in circulation; and many other things. Thanks to cryptocurrencies, governments cannot know precisely how much is in the pool. If a negative-impacting fiscal policy coincides with a negative crypto market swing, it could be devastating, as governments do not know the crypto market. According to Mark Dukas, such a possibility is rare, and can only happen when cryptocurrencies are ubiquitous. Some governments, such as South Korea, want to be safe.

Lost Revenues

Governments want a share of every transaction that goes on within their jurisdiction. If a producer can sell using Bitcoins or any other coins, it will be difficult for governments to claim taxes. So, governments are losing revenues especially when it comes to money exchange, one area that countries globally consider lucrative. As far as coins continue to change hands in breathtaking speeds with governments not partaking in the broth, expect more of them to try to stop it.

However, these currencies have endured worse — from when only a handful people knew about them to a time when we can comfortably say they are the future. It will be interesting to see how the debate will pan out especially when it comes to the economics of a possible takeover of exchange by coins from banks and central banks.

Conclusion

Mark Dukas Charlotte expresses enthusiasm about blockchain-backed assets despite the apparent bans. While issues of security should worry everyone, governments must find a way of accepting that the future is full of coins.