If you’re paying attention to the world of finance, you might have heard about the rise of cryptocurrencies like Bitcoin and Ethereum. These digital currencies have attracted a lot of attention and investment over the past few years, with some experts predicting that they could eventually replace traditional currencies altogether.
Let’s start with the basics: what is cryptocurrency, and why is it such a big deal? At its core, cryptocurrency is a type of digital currency that uses encryption techniques to regulate the generation of new units and verify the transfer of funds. This means that it operates independently of central banks and governments, and can be used to send and receive payments without the need for intermediaries like banks or payment processors.
Crypto was born out of the financial crisis of 2008, which saw traditional financial institutions fail and people lose their life savings. It was designed to be a decentralized alternative to the traditional banking system, one that could be used to store value and make payments without relying on banks or other financial institutions.
Fast forward to today, and cryptocurrency has grown into a global phenomenon. According to a recent survey, 14.4% of Americans own some form of cryptocurrency, and the number is growing every day. It’s not just individuals who are getting involved, either: major companies like Tesla and Square have invested billions of dollars in Bitcoin, while other businesses are exploring how they can use blockchain technology (the technology that underpins cryptocurrency) to improve their operations.
So why is the U.S. government taking such a hostile stance towards crypto? Recent regulatory announcements, including directives from the U.S. Federal Reserve and executive branch designed to debank crypto firms, a pending lawsuit against the largest and most trustworthy U.S. exchange, Coinbase, and increasingly hostile rhetoric from Congress, are far from appropriate.
It’s not just about the regulatory missteps, either. By discouraging banks from holding it and people from buying it, they are pushing away a significant portion of the population who could benefit from it. As I mentioned earlier, cryptocurrency provides an alternative to the inflationary dollar, which is a major concern for many people. For instance, in Puerto Rico, eggs are currently $7.50 a dozen, and it is just a matter of time until the price goes to $10. It’s no wonder many people are exploring other forms of currency.
Crypto presents an opportunity for people to explore other forms of currency that are resistant to inflation, can be stored securely on our phone, and sent to anyone at any time without a fee. It also presents an opportunity for businesses to explore new ways of operating, whether it’s through blockchain technology or new payment methods.
Change is hard, but making the same mistakes over again is worse. The government needs to realize that regulating crypto doesn’t mean debanking it. It’s time to explore the opportunities that crypto presents, embrace innovation, and create a regulatory framework that fosters growth and development.
The U.S. government has missed out on the potential of the crypto industry by waging a war against it. Instead of discouraging banks from holding it and people from buying it, they should be exploring the opportunities that crypto presents and creating a regulatory framework that fosters growth and development. It’s time for the government to realize that regulating crypto doesn’t mean debanking it.