There have been many ups and downs in the cryptocurrency market in recent times, all because of the probability of government regulations. Governments from different nations are nowadays criticising the cryptocurrency concept to a large extent. But, people are no time soon willing to accept these kinds of orders from the government because the government-driven cryptocurrencies will not be as beneficial as the privately-owned tokens. So, it is pretty clear that the efforts of the government to curb the movement of cryptocurrencies and their nation are feeling drastic. But, any time soon, this can happen that the government will bring about some rules and regulations that will suppress cryptocurrency activities like China. If you are interested in bitcoin trading check the bitcoin and monetary policy
The government is right in being worried about cryptocurrencies and their spread in nations. It is because they have valid reasons behind the same. You might think that the government wants to curb the moment of cryptocurrency just because they are worried that they will not be earning more money. But, it is just a half-truth. You should also know that cryptocurrencies are working more and more, and therefore, they are deteriorating the financial stability of the nations. So, there is quite a requirement for the government to curb any spread of cryptocurrencies, and the valid reason behind the same is explained in this post so that you can also understand why the government is doing so.
Low Fiat flow
The primary reason for the government to frown upon cryptocurrencies and every emerging digital concept privately owned is that it will decrease Fiat’s money flow. You might be pretty familiar with the fact that when people are using more cryptocurrencies for everything, there will be a lower you switch off the field money. Therefore, it will affect the flow of money in the nation. That is why it is also going to decrease the funds with the government, and that is going to be the downfall of the traditional government-driven financial system.
Emerging illicit activities
Another fundamental reason the government criticises the spread of cryptocurrencies everywhere is the illicit activities. When did the cryptocurrencies, it is difficult for the authorities to trace the origin of any money used in the illegal activities. Sometimes, the political leaders accept bribes in terms of the cryptocurrencies, and therefore, the authorities cannot even know if the black money is turning around in the nation. Also, as the origin is not traceable, the government is not capable of knowing if anyone in the system is corrupted.
Terrorist activities are growing in every nation of the world, and terror financing has been a significant problem. You need to know that the top officials of some nations are paying it to the terror groups for spreading terrorism worldwide. To curb the movement of these terror activities, it is essential to stop the financing. However, when any nation is not capable of tracing the origin of this financing, it is impossible to do the same. So, the government is right in worrying about the terror financing activities that are growing with the help of crypto space.
Lack of regulations
The lack of regulations on the government’s part has also been an essential concern for the government about the crypto coins. There are no regulations in most nations about cryptocurrencies, and therefore, people are exploiting this space to a large extent. It is being carried on until that day when the cryptocurrency space would crash, and no one would be able to recover their money from it. This can happen anytime, sooner or later. So, it is required for the government to take up some necessary steps to impose regulations on the use of cryptocurrencies.
The cryptocurrency market is highly volatile and has become an essential concern for the government. The market’s volatility allows the people to make money, but it is also in red signal for people to not put money in it. The government criticises this because the exact value can never be ascertained when there is high volatility. People are putting money into it, but any government regulation in this department does not prevent them. So, as per the government’s point of view, the cryptocurrency must have a lower degree of volatility.