It’s been a decade since the world’s first cryptocurrency was created. The world changed ever since. Early buyers became rich instantly when they sold it in late 2017 when bitcoin was at its peak. The main question continues to be; when will bitcoin become legal?
Wikipedia says the flagship currency is legal in most of South America, North America and Europe. The European Union legalized bitcoin by claiming that it’s a convertible decentralized digital currency. G7 also recognized it as an internet based payment service.
However, countries like China won’t recognize bitcoin as a payment commodity neither as a virtual currency. What could be the most likely reasons?
Illegal Transactions And Money Laundering
It’s the biggest fear for any government. People can actually use the cryptocurrency for illegal transactions and money laundering. But what difference does it make? People were engaging in illegal activities before cryptocurrencies existed.
It really doesn’t matter how they do it, with bitcoin or with USD. Bitcoin has been here for 10 years only but still, most illegal transactions are done with the USD. As you can see, the reason is not valid enough to ban bitcoins. You see. Using bitcoin would make the transaction permanent on the blockchain. Someone could track it. The USD on the other hand has lower risks as it can be exchanged anywhere.
People Will Keep Their Cash In Crypto
Banks depend on their customers. In fact if all customers were to leave a bank, it would be a matter of weeks and days before it goes bankrupt. So what do banks do to avoid this? They offer services like better mobile apps, bonuses and low transaction fees to lure them into staying.
But if someone may use crypto to keep funds safe on a hardware wallet. What would be the need for a bank? And when you need to transfer funds, it takes less than a minute regardless of where they are, even if it’s on the other side of the globe.
Cryptocurrencies have eliminated the need for banks. They have further educated the masses on how to keep money safe and in a personal wallet. You can even use the funds whenever you need them on a daily basis.
No One Controls Crypto
This is great news to the common person, but to the government, it’s a threat. In the current, traditional system, when someone uses your credit card to buy something, you can issue a claim that you didn’t make the transaction and you can get your money back.
With cryptos however, you can’t do the same. Transactions are irreversible. It can be a plus but it’s also a downside. If you send crypto to the wrong address, consider it lost forever.
You therefore need to be careful of how you send money and how to protect it as well. The stress may not be experienced with a bank, but if the bank goes bankrupt, you may lose everything.
There can be a little gray area where banks and bitcoin can work together. However, bitcoin will not be completely legal anytime soon. Governments are still adamant on controls. They could even ban it, people will still use it. Bitcoin has grown from $0 to $10,000 based on people’s desire for financial freedom and privacy.