The popularity of cryptocurrencies has significantly increased over the past few years – tell us something we don’t know, right? The peak of interest in Bitcoin (and altcoins for that matter) took place in December 2017, which is understandable, but it hasn’t totally died down in the following months, despite what others might say. The possibility to send value on a peer-to-peer basis is obviously something that mass audiences are now excited about, even if governments are still not eager to legalize this digital method of payment.
Although the US Securities and Exchange Commission has declared its intent to address the idea of a Bitcoin ETF – talks have been going on for more than a year already – it keeps postponing its decision again and again. In Europe and a few other countries, Bitcoin is recognized as legal tender, but there is still no legal basis for the circulation of cryptocurrencies.
What is the main reason behind this stagnation? Are authorities simply afraid of this new monetary power? Let’s take a closer look at the aspects of Bitcoin legalization and the major obstacles that stand in its way.
Google Trends: the interest in Bitcoin hasn’t fully died down after its December 2017 peak.
Perhaps the main reason why authorities don’t rush to legalize Bitcoin is that it’s beyond their power to control it.
Governments know everything about every single fiat penny: where it has been issued, through how many hands it has passed, who has made profits with it, and how much taxes have been paid on it. And, while cash still offers some workarounds to hide our traces, your bank account is fully naked.
The story is different with cryptocurrencies, as they offer a much broader variety of options to get away from the ever-watching eye of the “big brother.” Bitcoin transactions and wallet balances are visible for everyone on the web, but linking a specific address to a real person is not the easiest task to accomplish.
Also, there are a number of anonymous cryptocurrencies such as Dash, Monero, and more recent projects such as Grin and Beam that can help you regain your anonymity. All this doesn’t exactly add points to cryptocurrencies as a legal means of payment from the authorities’ perspective.
If a person or a company doesn’t pay taxes, the government can apply brute force and take its share by withdrawing funds from a bank account or by totally freezing it. It can’t do likewise with your Bitcoin wallet because – getting back to the first point – it cannot control cryptocurrencies.
Since more and more taxes are invented every year, businesses have all the reasons to look for a tool that can help them avoid the authorities’ craving hand. Cryptocurrencies seem to be an ideal tool for that and this is another reason why they can hardly become a widely accepted, legitimate means of payment in the near future.
Finally, while Bitcoin isn’t exactly untraceable, it still makes it the perfect tool for the black market and crimes of all sorts.
Take Silk Road, for example. Back in 2011, this infamous platform sold drugs, weapons, fake documents, and other illicit substances. Users were able to pay for all that with BTC. Although the platform’s founder Ross Ulbricht has been long imprisoned and his brainchild deleted from the annals of the web, the idea has found many followers giving more headaches to the police.
What does the future hold?
With all the above said, it’s obvious that the chances of Bitcoin being fully legalized across the globe are very small – at least in the next few years anyway. Governments won’t stand any third parties depriving them of their right of issuing money and claiming tax.
That being said, it is also obvious that Bitcoin is here to stay. There are already many merchants on the web such as Overstock and Gyft that accept BTC along with fiat payments. Companies such as Wirex and Bitpay issue plastic cards where you can store cryptocurrencies too, which makes transactions even easier.
Unless you want to do some money laundering or buy yourself a handgun or two, you are free to use BTC as a usual means of payment wherever it is accepted.