Introduction
In the past few months, Bitcoin is experiencing one of its most significant Bull Runs. At a time when the COVID-10 Pandemic is destroying world economies, Bitcoin and other crypto have emerged as a strong success story.
In the last five months of the pandemic, the crypto has gained nearly 400% to hit a high of over $12K in August. While this is great news for investors and traders, it has ruffled quite a few feathers in government circles.
In this article, we are going to look at why the US government fears Bitcoin and other cryptocurrencies. We are also going to look at what steps the US government is taking in relation to Bitcoins and other cryptocurrencies.
Can Bitcoins undermine the Dollar’s Superiority?
One of the biggest reasons why the United States and its institutions are scared of Bitcoins is because they fear that Bitcoins and other crypto can pose a threat to the global hegemony of the dollar. This fear was conveyed in a public domain to the world for the first time by the US Secretary of the Treasury.
Steve Mnuchin stated that Bitcoin is a serious threat to ‘national security’. Donald Trump had also emphatically stated that Bitcoin is ‘thin air’. However, the popular public sentiment in favor of the crypto has been growing because of heightened valuations and growth.
The truly global and decentralized nature of Bitcoin means that it is beyond the control of the government. Controlling money is a critical way, governments and authorities keep citizens under check. How you have used the money, why you have used it, who have you paid it too are all questions the government is deeply concerned about.
Is Bitcoin a threat to the authority of the US Government and the Federal Reserve?
In the past few months, the government is engaging with this exact question. It has even put out job listings asking researchers to find and explore this question. To understand whether Bitcoin and other cryptocurrencies are a threat, we must first understand their very nature.
As we all know, international trade is majorly conducted in dollars. It has become the global standard of making payments whenever we are conducting business. However, the dollar suffers from its own sets of problems including currency conversion issues, increased commissions, and taxes, and slow processing by banks.
Bitcoin on the other hand does not suffer from any of these issues. Meaning, you do not have to suffer from fewer payments because of conversions. As the payments are direct and do not depend on intermediaries, there is no question of paying commissions as well. All this makes Bitcoin adoption favorable for international trade and commerce.
The Rise of China’s Digital Yuan and the challenges on the US Dollar
Even as the United States struggles to engage with Bitcoins in a meaningful fashion, the Chinese Yuan is also emerging as a strong. The Chinese state was very strong in its clampdown on cryptocurrencies only to start engaging with the technology itself in state capacity.
According to the experts, China is far ahead in terms of developing cryptocurrencies and Blockchain technology than any other country in the world. The emergence of the Digital Yuan is the middle of the pandemic signaled their strong intent to use the digital manifestation of their currency to challenge the global superiority of the American dollar.
China has already started experimenting with the Digital Yuan and has tied up with many of its billion-dollar private entities like Tencent and Alipay to roll out the currency in its digital form.
The Final Word
However, not all is lost, as consumers in the United States are increasing investments in Bitcoins. This is positive as the United States continues to be the major action area of the ecosystem.
The government now should engage with Bitcoin and other crypto and look to exploring the technology. If you are a US citizen who wants to invest and trade in the lucrative cryptocurrency, Bitcoin, you can visit- Profit Secret.
