Authorities strive to take everything related to money under control. However, cryptocurrency, that has nothing to do with central banks and is not under control of any governmental body, has become an exception. Now, when electronic cash has become ordinary and usual, each social group takes advantage of it in order to conduct anonymous payments and pay no taxes.
That’s exactly why the government is not able to ignore cryptocurrency. Bitcoin is unprofitable for the governing bodies for following reasons:
- electronic cash poses risk to domestic currency;
- the governing bodies do not collect enough taxes;
- the government loses control of cash flow;
- Bitcoin lays the groundwork for illegal transporting of goods.
Bitcoin is also associated with changes. Electronic cash differs from other currencies; it means it may shake the world economy in case of cryptocurrency recognition. What else makes Bitcoin dangerous for the government?
- Authorities control the supply of money. The governing body may take money from a government-controlled bank, in such a case it promises to pay the arrears from the taxes.
- Every citizen and business has to pay the governing bodies for using core banking system when making payments. Banks always cooperate actively with the government reporting everything about the clients’ payments and incomings. People won’t need to turn to the bank using Bitcoin: cryptocurrency lets users enter into trading relations almost for free and anonymously.
- Cryptocurrency doesn’t replenish State treasury. The transaction fee doesn’t go to the issuing bank as well as electronic cash is imposed with no taxes.
- Anonymity lets the citizens and various enterprises avoid systematic control of monetary transactions.
- Electronic cash has a bad impact on domestic currency the governing bodies control lots of spheres with. The growth of electronic cash reduces government control.
- Bitcoin makes it impossible for governments to track payments. It gives people an opportunity to easily withdraw money to any country of the world.
- Turnover of illegal goods. It is impossible to find out who has transferred Bitcoin, that what makes trading of illegal goods much easier. In this regard, cryptocurrency is not profitable for the government, that’s exactly why each country tries to forbid Bitcoin or, at least regulate cryptocurrency.
It is worth mentioning the fact that the countries which haven’t forbidden electronic money get profit from it turning electronic money to advantage. However, Bitcoin becomes a perfect alternative to cash and an increasing number of people throughout the world give preference to cryptocurrency. That’s exactly why governments afraid of electronic money which may become a real competitor to each banking institution.