- Russia considers legalization of crypto
- India is on the path to legalization
- The last stronghold of independence
- The circulation of fiat money is under the control of states.
Over the last 7 days, the price of Bitcoin has increased by almost a quarter. Other cryptocurrencies are also going up. Even the scandalous Shiba Inu (SHIB) coin has increased by 62%.
What are the reasons behind this turnaround? Let’s try and make some sense of what is going on.
On Tuesday evening, an announcement was made that the Central Bank of Russia has agreed with the government that cryptocurrencies should be regulated and not prohibited. Russia is the eleventh largest economy in the world and an influential player on the international market.
The authorities are planning to introduce a tax on major crypto transactions and the licensing of crypto exchanges. The mining regulation has not been decided upon yet, it not being mentioned in the announcement at all.
Another factor is the announcement of the Indian government that the country has introduced a 30% tax on any income obtained by transferring virtual digital assets. In fact, this means that India has completely legalized cryptocurrencies.
Sidharth Sogani, Founder and Chief Executive Officer at crypto research firm Crebaco, commented, “You can’t tax something which is illegal. Hence, this is a very positive move by the government and is very good for the industry. If there are tax clarities in this space, more money is likely to come in.”
Moreover, India might introduce the digital rupee in the next two years. One by one, some countries start following the path of China that has issued digital yuan. It is not possible to ignore the new economic phenomenon any longer.
The entire international financial system is controlled by states and regulators. All plans to legalize crypto bump against their absolute control. For example, according to the Russian announcement, trading can only take place via licensed organizations. Such organizations will likely have to report information about their users to the authorities.
CoinDesk has organized Privacy Week 2022, with reporters and analysts examining the global political and financial from the point of view of privacy. The results are unnerving. All transactions in fiat money are controlled by the authorities of various countries.
All transactions in fiat money are controlled by the authorities of various countries.
Everyone is aware of surveillance and potential access to personal data. The documents leaked by Edward Snowden hardly came as a surprise either. People have known for a long time that ensuring safety is often used as a euphemism for total control. The last instruments that can be used to protect privacy are crypto and blockchain.
However, national governments are not willing to give up any power at all. They claim that they only mean to ensure safety and fight terrorism.
However, it only attracts more attention to crypto. In fact, terrorists use various sources of financing and are way more likely to use fiat money since it is a more efficient way. On the contrary, being able to engage in small-scale business activities without suffocating taxes and with the protection of financial privacy is important for many people. And not because they are trying to finance some criminal activities. Human beings crave privacy. Nobody enjoys living behind the glass.
Murtaza Hussain, a reporter who focuses on national security, has considered a scenario that would unfold if a tyrant came to power in the current circumstances. The potential severity of repressions in the digital world is pretty scary, even for those who think they have seen it all.
“An authoritarian government administering a CBDC would have total oversight of every transaction anywhere on Earth using that currency, as well as the ability to freeze, expropriate or even force-spend funds owned by private individuals as it deemed fit. The prospect of such state-controlled currencies, like the digital yuan already being rolled out in China, also highlights why a technology like Bitcoin might wind up in future being the only insurance against financial repression in authoritarian countries, and even in democracies like the United States,” Murtaza Hussain commented.
“Decentralized currencies like bitcoin represent a possible safe haven against future government overreach in a world built upon CBDCs,” he added.
On the one hand, national governments are gradually giving in because they understand that they will not be able to overpower crypto and vanquish technology. On the other hand, despite all the efforts of regulators, Bitcoin and altcoins keep going up since the international community is reaching out to them as the last refuge from total control. It has become clear by now that crypto is not a bubble and it is no good waiting for it to burst.