Are Cryptocurrencies a Government Ruse to Introduce a Cashless Society?
It's safe to say that many crypto enthusiasts are anti big government and fiat monetary systems. People who prefer a decentralized medium of currency exchange and the freedom to move assets, without government regulation, instantaneously around the world, to anyone's wallet.
While governments, around the world, are parroting the notion that cash is evil, that criminals and drug dealers use cash in their nefarious activities. Governments and their think tank influencers, speak of removing high denomination bills from circulation. India has gone ahead and done exactly that.
At the same time, governments, working in lockstep, have been running an all out war on cash and savers, since 2009. Removing incentive to savers by lowering interest rates to near zero and below. Keeping interest rates unnaturally low helps nations keep their deficit spending manageable, while at the same time, disincentivizing holding capital in a bank.
The financial institutions have gotten to the point that they seem openly hostile to their customers. Your deposits in a bank are considered assets of the bank itself, which you have a claim to. Now that bail-in protocols have been put in place, if your bank is deemed to have a capital shortfall, your money can be used to plug the bank's balance sheet, read up on Cyprus and Spain if you doubt this. Bail-ins aside, consider the limitations that a bank puts on your access to your funds. Limiting cash withdrawals, in many cases, to $10,000 or less and being cross-examined like a suspect, for your troubles.
All of the hassles paired with a lack of incentives, has created a segment of society that has sought out a method to 'unbank' themselves. As if on cue, the cryptocurrency universe has exploded onto the scene, quickly gaining notoriety and adoption. Cryptos seem a near perfect solution to the many obstacles and risks that traditional cash management, through a bank, currently offers. Everyday, more businesses are opting to accept bitcoin and/or ethereum as payment options. Even if they don't, paying with a Visa or Mastercard, loaded with the value from cryptos, are accepted most anywhere.
Governments around the world have shown interest in the blockchain technology that cryptos are built upon. The likes of Russia, Japan, China and Canada, as well as the UN, have started to investigate how this technology can be applied to their financial systems. Japanese banks are already conducting some business with ripple, a coin that helps the banks close small transactions without having to use the SWIFT system or bank wires.
Once banks and governments begin to transact exclusively on the blockchain, the demand for physical currency will be degraded. The current level of disincentives that the customer currently experiences with traditional banking will likely only get worse, pushing the late adopters out of the banking system and into the crypto space. Industry may start doing their payrolls in crypto and paying invoices in the same fashion. Using the blockchain to reduce expenses and streamline operations.
Crypto enthusiasts have enjoyed a few years now of unregulated, mostly anonymous, transactions in the crypto space. This will not last for much longer. Since the blockchain records every transaction and is not subject to editing, all of our digital transactions are forever retrievable from the ether. Governments like to regulate financial systems and tax the underlying transactions. They enjoying taking a portion of a person's gains, whether it be in the stock market or on a virtual exchange. As more business is conducted on the blockchain, the yoke of the tax man will be thrown on the backs of those that choose to transact digitally.
Interestingly enough, the two factions at issue in this article appear to be meeting up at the same spot, coming from two very different perspectives of the financial world, governments and the people. Governments of the world want to have full control and knowledge of every financial unit in circulation and the blockchain is a tremendous tool to keep a permanent ledger of such activity. They prefer you to keep spending your fiat dollars rather than saving them, propelling their financial ponzi scheme along.
The early adopters of crypto were attracted to the anonymity and decentralization of the coins, as well as their speculative nature. As cryptos are adopted further by governments, banks, retailers and service companies, the need for cash in society will become greatly reduced and actual currencies themselves will likely be added to the blockchain.