Even though more and more governments are waking up to the need of embracing and adopting cryptocurrencies, the truth remains that many governments around the world continue to be quite wary about crypto. Even as countries like Venezuela and Argentina make attempts to adopt crypto in one way or the other, why do some other governments continue to maintain tenuous ties with crypto? Why do some governments not like crypto? Let’s dig deeper.
You May Also Read: Is Crypto A Poor Store of Value?
Now, before we ascertain whether or not these governments are correct in hating on crypto, it is imperative to find out why it is that these governments crave control, what it is that makes them so suspicious of crypto.
Decentralization in Crypto: Do Governments Fear It?
Governments usually tend to work by issuing centrally backed fiat currencies. Regardless of how much praise we may ultimately reserve for cryptocurrencies, we must admit that fiat currencies come with their own set of advantages.
They come with a guarantee and a promise (of getting an equivalent value back against a fiat note) from a source of centralized authority: the government.
Although this model can fall short in areas with unstable governance (like in the case of using Petro crypto in Venezuela), it can lead to quite opposite results in areas such as India or even the US where governments play a pivotal role in controlling the trust of the people.
In such a situation, to give up control to a decentralized peer-to-peer form of payment, its multitude of merits notwithstanding, can prove to be quite problems.
Why Do Governments Want To Control Currency?
The money supply of a country determines many micro and macro aspects of its economic structure.
For a country’s financial landscape to function as a well-oiled machine, it is imperative for a central authority of experts to be able to control and manipulate money supply as per the economic needs of the country.
Therefore, from the angle of a country’s fiscal policy and also for preventing miscreants and wrongdoers from having any kind of control over the money supply, as may become possible in a decentralized system like that of cryptocurrencies.
From this perspective, it makes a great deal of sense for any government to want to contain the spread of crypto.
However, considering how fast such technologies are developing, a more moderate approach, that of striking a balance between the two, would be more approachable.
Here Are A Few Other Articles For You To Read Next: