The Power of Cryptocurrency
Secure, fast and often anonymous, cryptocurrency presents the chance for those who can afford it to break the monopoly on accepted currencies of nation-states.
This opportunity has spooked nation-states, in particular, the United States and in a rare display of unity, both Democrats and Republicans have taken aim at cryptocurrencies as a source of danger. AsForbesreports “Bitcoin and other ‘unregulated crypto assets’ found themselves in the presidential crosshairs late last week when President Trump unleashed a series of tweetsseemingly sparked by regulatory unease surrounding Facebook’s Libra project.”
Trump has also himself stated "I am not a fan of bitcoin and other cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air." He continued "Unregulated crypto assets can facilitate unlawful behavior, including drug trade and other illegal activity."
Notice, one word "unregulated.” Trump implies that due to its lack of accountability of a central bank or monetary authority, it is therefore dangerous for a nation-state to allow its usage or facilitate its further expansion.
However, markets seem to disagree with the President’s and the US Congress’s assessment of cryptocurrenciesand are embracing it as a form of payment. As The Independentreports “Some of the world's biggest retailers have begun accepting cryptocurrencypayments in the form of Bitcoin, Ethereum, Bitcoin Cash and the Gemini dollar.” Most of the notable companies which are accepting cryptocurrencies as payment are “...Amazon-owned Whole Foods, Nordstrom, Starbucksand dozens of other companies...”
One could view this as a move away from the nation state’s monopoly on the control of transactions between consumers and companies or companies wanting to cash in on “the next big thing.” Either way, it is a fact of life that cryptocurrencies whether that be Bitcoin, Ethereum or the Gemini dollar will be a permanent addition to the business landscape.
The allegation that it allows criminals and other undesirable entities like rogue nations to trade anonymously, illegally and without accountability is one which holds merit in part. It is perfectly logical that an immoral actor, state or non-state, could utilize the neutral opportunity for their nefarious means. However, that is not the fault of the cryptocurrency itself. We do not hold currencies like the US Dollar responsible for immoral or nefarious transactions undertaken using it as a means of payment: so why is cryptocurrency held to the same standard?
I believe it is because nation-states, particularly those who have the most to lose like the United States, would be content to see cryptocurrency and the various versions thereof disappear from the world entirely. Such an action would guarantee for this century at least that the US Dollar's status as the go-to currency for international transactions.
The battle between cryptocurrency and the nation-states which would desire its demise will continue for as long as cryptocurrency poses a current and credible threat to the nation state's monopoly on the power of transaction. It will be interesting to see how it turns out, however, one can be certain and that cryptocurrency isn't going anywhere, no matter how much a politician or nation-states wishes it away.