Some governments worldwide have announced their plans to regulate Bitcoin. Here’s why they should not make such a move.
Bitcoin is a technological innovation in the financial world. This cryptocurrency enables people to transfer funds faster and more straightforwardly. Ideally, using this virtual currency doesn’t require an intermediary. And people can do business with people on different continents and receive Bitcoin payments faster.
However, Bitcoin has raised controversy around it since its introduction in 2009. Bitcoin enthusiasts herald this digital currency as an equitable and new monetary system. On the other hand, critics argue that criminals could use it for illegal activities since no central authority can regulate it. Ideally, Bitcoin is not subject to government regulations.
Meanwhile, some governments are concerned about the decentralized nature of this digital currency. That’s because more people are purchasing Bitcoins and Ethereum on platforms like ethereum-trader.app and using them to pay for services and products. Thus, Bitcoin is competing with conventional currencies of some countries. And if this trend continues, some governments might lose control over their countries’ monetary policies. Nevertheless, some experts argue that governments should not regulate Bitcoin. Instead, they should let it thrive independently as per Bitcoin’s protocol. Here’s why.
Innovations Benefit Consumers
Historically, innovations bring new services and products that benefit consumers significantly. For instance, Bitcoin lowers the costs of receiving and transferring funds. It also facilitates fast money transfer. And this makes consumers’ lives better. Like email facilitated communication between people, Bitcoin has brought similar efficiency in the financial sector.
Bitcoin compares to ride-sharing services connecting riders and drivers or email facilitating faster communications. And all these technologies connect peers while providing tools for entrepreneurs to improve and control their lives.
Bitcoin Can Help during Financial Crises
Satoshi Nakamoto introduced this cryptocurrency after the 2008 financial crisis. Initially, people considered derivatives and other financial innovations dangerous. However, Bitcoin has proven helpful as a financial platform that uses the internet to empower people.
This cryptocurrency enables people to use the internet to transfer funds online regardless of their locations. During the COVID-19 pandemic, some people lost their jobs. And this prompted them to start trading Bitcoin online for profits.
Some experts have attributed the previous financial crises to the government’s interference. Thus, some governments direct their central banks to mint more money leading to inflation. Since no government can manipulate or regulate Bitcoin, it can help individuals store value during financial crises.
Bitcoin Improves International Business
A primary reason to allow Bitcoin to prosper is its ability to facilitate seamless value transfer. Ideally, people should think about Bitcoin as an email for money or digital cash. Bitcoin’s impact on international business is clear.
Currently, conventional methods charge almost 8% of the total cost of transferring money to other countries. That’s because third parties play a role in the transfer. On the other hand, Bitcoin eliminates such intermediaries. That means people don’t require banks and other intermediaries to transact with Bitcoin when doing international businesses.
Bitcoin is an open and worldwide system that allows anyone to participate. As long as you have a smartphone or computer and an internet connection, you can join the Bitcoin network and use this digital currency. And this creates a promising potential for anybody to do business with customers or clients around the world.
Attempts to regulate Bitcoin to prevent its illicit uses may not solve the problem. After all, people and organizations were engaging in criminal activities even before Bitcoin’s introduction. Also, regulating Bitcoin will be difficult for governments due to its decentralization. On the other hand, allowing Bitcoin to thrive without government interference or regulation means it will serve its intended purpose. Thus, Bitcoin will allow people to transact locally and internationally more efficiently if governments don’t regulate it.