Table of Contents
main conclusions
Chairman of the US Banking Committee Suggested a Ban on All Cryptocurrencies Many Declare Crypto Immune to Government Shutdowns, But This Is Only Directly True By attacking the ecosystem and the ability to access it, crypto can be significantly reduced by the legislators
You can’t do away with Bitcoin, the saying goes. But that is missing the point. First, let me be clear and state that this mantra is true, at least technically. Bitcoin exists on the Internet and is therefore immune to being cancelled. Unless, of course, you somehow turn off the Internet. But for all intents and purposes, Bitcoin is decentralized and exists in the online world, a feat of technology that makes it resistant to restrictions.
Bitcoin can’t be destroyed directly, but indirectly it’s a different story
But while a direct blockchain shutdown is impossible, governments can, at least theoretically, heavily affect Bitcoin and reduce its adoption by the masses. It might not qualify as technically destroying it, and I’m not commenting on the likelihood of that happening, but there’s little doubt that if enough effort is put in, an attack on Bitcoin by lawmakers could be devastating. We need only look at the prevalence of centralized entities in space. While Bitcoin itself is decentralized so that the masses can access it, the vast majority goes through centralized companies such as Binance or other exchanges. And what happens if governments go after these companies? These companies will be forced to comply with the laws. Of course, decentralized exchanges (DEXs) will remain and, like Bitcoin itself, are resistant to direct cancellation. But would you expect Bitcoin to achieve mainstream success and continue to become a legitimate financial asset if DEXs were the only option? Institutions would not only be reluctant to go down this path, but could also be prohibited from taking it.
US Banking Committee Chairman Suggests Cryptocurrency Ban
I write this article now in light of the story that has emerged about US Banking Committee Chairman Sherrod Brown suggesting a ban on cryptocurrencies. Brown said, “I’ve already gone to Treasury and the Secretariat and asked for a whole-of-government assessment through various regulatory agencies. … The SEC has been particularly aggressive and we need to move forward in that way and legislatively, if at all. It was ridiculed in some quarters, but it’s worth paying attention to. The US is the financial capital of the world. If the SEC went out and banned it, it would have a seismic impact. Think of the market share that could be prohibited from holding Bitcoin – institutions, pension funds, public companies, etc. Or the entire infrastructure that would be demolished, such as exchanges. On the other hand, it remains a remote possibility. And returning to my earlier point about how people overlook the potential for governments to shut down Bitcoin, Brown acknowledged that “We want them to do what they need to do at the same time, maybe banning it, although banning it would be very difficult because they would go offshore. , and who knows how that would work.”
final thoughts
I’m not predicting any sort of end to Bitcoin or crypto because of this. I just think that many ignore how harmful governments can be to the world’s largest cryptocurrency. Of course, the beauty of blockchain is that it cannot be directly turned off. But indirectly? That’s a different story. Governments carry too much power to be dismissed as “irrelevant” when it comes to Bitcoin. So far, there is nothing to think that countries like the US will make such drastic moves to ban cryptocurrencies. But after a torrid 2022 that saw scandal after scandal rock the space, comments like Sherrod Brown’s come as no surprise. On the off chance that those words were put into action, it would be foolish for investors to consider it a benign development for cryptocurrency.
