- US Banking Committee Chairman Suggests Banning All Cryptocurrencies
- Many Proclaim That Crypto Is Free From Government Shutdowns, But That’s Just Plain True
- By attacking the ecosystem and the ability to access it, crypto can be significantly undermined by lawmakers
Bitcoin Can’t be turned off, so the saying goes. But this point is missed.
First, let me be clear and confirm that this mantra is, at least technically, true. Bitcoin exists on the Internet and therefore cannot be shut down. Unless, of course, you somehow turn off the Internet. But for all intents and purposes, bitcoin is decentralized and exists in an online world, a feat of technology that makes it resilient enough to be moderated.
Bitcoin Can’t Be Shut Down Directly, But Indirectly Is A Different Story
But while a direct shutdown of the blockchain is impossible, governments could, at least theoretically, heavily damage bitcoin and prevent its adoption by the public. It may not technically be eligible to be shut down, and I’m not commenting on the likelihood of that happening, but there’s no doubt that if enough effort is made, a parliamentarian attack on bitcoin could be devastating. Is.
We need only look at the prevalence of centralized entities in space. While bitcoin itself is decentralized so that the public can access it, the vast majority goes through centralized companies such as Binance or other exchanges. And what if governments go after these companies?
These companies will be forced to follow the laws. Sure, decentralized exchanges (DEXs) will remain, and like bitcoin itself, are flexible enough to shut down directly. But would you expect bitcoin to achieve mainstream success and continue to grow as a legitimate financial asset if DEXs were the only option?
Institutions will not only be reluctant to follow this path, they may even be banned from holding it.
US Banking Committee Chairman Suggests Banning Cryptocurrencies
I am writing this article in the wake of a story emerging regarding Sherrod Brown, chairman of the American Banking Committee, suggesting that a ban on cryptocurrencies,
“I’ve already gone to the Treasury and the secretary and asked for a government-wide assessment through all the different regulatory agencies. … The SEC has been particularly aggressive, and we need to move forward that way and legislatively.” needed if it comes.
It has been derided in some quarters, but it deserves attention. America is the economic capital of the world. Should the SEC come out and ban this, it would have a seismic effect.
Think of the segment of the market that could be banned from holding bitcoin – institutions, pension funds, public companies, etc.
On the other hand, it remains a remote possibility. And returning to his point earlier about how people tend to overlook the ability of governments to lock down bitcoin, Brown acknowledged that “We want them to do what they need to do at the same time, maybe ban it, although banning it is very difficult because it will go offshore, and who knows how that will work out.
I am not predicting any doom for bitcoin or crypto on the back of this. I think many people overlook just how damaging governments can be to the world’s largest cryptocurrency.
Sure, the beauty of blockchain is that it can’t be turned off directly. but indirectly? That’s a different story. Governments hold too much power when it comes to bitcoin to be written off as “irrelevant”.
As of now, it is unimaginable to think that a country like the US would take such drastic steps to ban crypto. But after a tumultuous 2022 that has seen one scandal after another in the space, comments like Sherrod Brown’s are not surprising.
In the remote possibility that these words were ever materialized, it would be foolish for investors to write this off as a benign development for crypto.