Most governments are finding ways that they can get involved in the crypto currency sector. Most governments globally are working on various types of digital currency. For example, the USA is better at auctioning bit coins. The USA government however, seizes crypto currency that most lethal criminals use. The relationship between crypto currency and most federal governments has been making headlines over years. USA for instance is one of the biggest bitcoin holders.
The government sells bitcoins to the public through auctioning. However, the government may buy bitcoins but the highest percentage of the bitcoin owned by the government is acquired from taking it from citizens who are involved in criminal activities. Apart from the government seizing bitcoins from the criminals, they acquire bitcoins through.
The government is capable of investing in long-term viability of bitcoins, which brings many returns in turn. When the prices go down, then the government has the chance to buy more bitcoins and wait for the prices to go up.
When the government mines, it gains more coins that validate the block chain transactions. Since the government can afford to hire the best gurus in bitcoin mining, they can acquire all amount of bitcoin they want.
The government however does not love bitcoins too much due to many reasons that arise from use of bitcoins. If asked, most governments will vote to do away with bitcoin and other crypto currencies. Countries like China have banned bitcoin and other crypto currency use. The fast growing nations are in fear of losing control of the economy where people will not use cash and use bitcoin that is not controlled or regulated. Many people today are opting to use biotin for payments. There are many reasons why the government is trying to do away with bitcoins.
The government is slowly losing control of traditional currencies because of decentralization. The government is capable of changing the policies in the monetary sector. With traditional money, it is easy to track criminal activities. With power over currency, the government can control the economy to the right direction. Bitcoin uses advanced technology that blocks the authority from accessing any types of transaction or even know who is transacting. With this, the government is slowly losing power of control over the activities online.
Rise of criminal activities
Bitcoin is not traceable; therefore, most criminals are using it to carry out their activities. Drug and human traffickers are using bitcoins to transact and the rise of crime is getting out of hand. Currently criminals can transact from all over the world without being caught. Bitcoin is used because there are several advantages that favor criminals such as;
1.Bitcoin ensures that you remain anonymous.
The government is struggling with most criminal activity’s tuatara done through bitcoins since it is hard to trace the transactions. The identities re hard to trace since the people carrying out the activities are unknown. The crypto address used is a random character that matches a bank account. The criminals can therefore use bitcoins to transact when paying for the activities.
Here are some criminal activities that bitcoin is used;
Bitcoin has become one of the easiest way to cover up the origin of illegal money that criminals make through illegal activities. Over $9 billion has been laundered in 2021 through bitcoins whereby in 2022 the activities have increased by 30%. Laundering money through crypto currency has become the easiest way that is done online. The activity is highly untraceable making it easy for criminals to launder money. The activity has also reduced the risk of getting caught walking around with huge amounts of money.
Since bitcoin activities are not easily traceable, criminals are kidnapping and requesting for ransom through bitcoin. It helps them hide their identities and will hardly be caught.
Crypto currency defrauding
People have made he amounts of cash since bitcoin became famous. Today there are several millionaires thanks to bitcoin. Bitcoin has become the new way to get rich within a short period. People have started defrauding through bitcoins since they are not traceable.
2.Easy to access and speed
Normal bank accounts can give you a hard time when you want to carryout transactions especially large amounts of money. In most cases, the bank has regulations concerning the amount of cash one can transact. Large amount of money raise alarm and it may lead to being investigated. With bitcoins, you can transact any amount of money without getting issues. The money is easy to access and may lead to people carrying out any types of activities. All that one requires is internet connection. No central authority control Bitcoins. No third parties are needed to authorize the transactions.
3.Bitcoins are easy to store and transfer.
Bitcoins do not need physical storage materials unlike cash that need banks and wallets. Bitcoins will therefore have less attention from the authority or thieves. It is easy to transact bitcoins without limit of location. You can transact bitcoins with people from any country in the world within seconds.
Bitcoin is becoming a threat to business of most central banks in the world.
The government is in control of all economic activities. Central banks have lost their business in central banks since people are no longer using cash. A loss from central banks is a loss to the government.
Treating fiscal process is difficult
Since bitcoin uses block chain technology, fiscal activities are hard to control. The government cannot regulate activities and therefore it is hard to tax people. Since the introduction of bitcoins, the government has lost a lot of money that is earned from taxation. The economy is slowly getting worse since the introduction of bitcoins and other crypto currencies.
Bitcoin is young in the nation and its stability cannot be predicted yet.
Some countries are waiting for several years to study the market and see how it goes. The countries will therefore come up with regulation ways, which will help them control the activities.
In conclusion, most countries get governments get bitcoins by seizing from the criminal. However, the governments do not think bitcoins are a good idea due to lack of control over the activities. In case the government learn how to regulate bitcoins, they will decide if it can be used or banned totally.