Why governments fear cryptocurrency II

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Well I believe that there are alot of reasons why governments fear cryptocurrency as that fear is shown on how strict the regulations are on cryptocurrency in many countries today and in some countries even they ban or view cryptocurrency in general as an exhibit and don't tolerate it's use and I shared some of these reasons on my first post on this topic.

Today also I will be highlighting some of the other added reasons why I feel is behind the fear government have as it concerns cryptocurrency because it seems that almost all government today have one or two concerns regarding cryptocurrency and even some that are becoming somehow free with it still have some of these concerns I will be highlighting here.

I mean they fear cryptocurrency and there is a reason for that which I will be sharing here today.

The reason for these fear possibly involves;

Consumer Protection

Most is really out of concern for the users of cryptocurrency and it stems from a legit concern of wanting to provide protection to cryptocurrency users due to the fact that for the most part cryptocurrency is an asset class without regulations and for this reasons it exposes most of it's users to great risks.

Now what are some of these risks? Well the risk that comes from cryptocurrency especially due to the absence of regulation includes scams which is all too common here and frauds becomes prevalent in this space and cryptocurrency market often experience market manipulation due to it being hugely unregulated.

So the scams and frauds as well as market manipulation is one of the things experience by consumers here and this is one of the reasons why governments fear cryptocurrency and truly feel it's easily used as a platform for fraudsters to operate undetected.

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Economic Sovereignty

Also here in the cryptocurrency space it's very easy for transactions to be made without the watching or prying eyes of the government and what this does is remove any control whatsoever from them since traditional financial systems doesn't dictate anything for cryptocurrency use so this becomes a concern to government.

With traditional financial system government could have oversight over transactions and they are then able to enforce capital controls but with cryptocurrency they are not able to do that and this lack of control means they can't manage cryptocurrency like they can do fiat or any government controlled currency or asset which also impact their ability to be in a better position to monitor the economy of the sovereign state they feel.

Governments feel with cryptocurrency they can't be able to monitor the true economy of the state since they have no control over it.

Competition with National Currencies

This is another place for government major concern or fear, which is cryptocurrency being in fierce competition with the national currency, they dread that cryptocurrency will win if it ever comes down to that and ofcourse they don't want for any reason for cryptocurrency to replace the existing currency of the land.

They feel that if they were to allow cryptocurrency and give it free hand it would no doubt surely lead to mass adoption and with that people may not even see the need to use their countries own currency, they fear a mass adoption for cryptocurrency would shift all attention away from their traditional currency to cryptocurrency and that will see demand for cryptocurrency rise whilst that for the national currency decline sharply they fear it would be bad for economy.

Governments do not want cryptocurrency to replace their money for one that will remove control of monetary policy from them and give it to the masses and ofcourse they claim such a thing would lead to an economical unstable state, this is one major concern of the government.

Energy Consumption

Governments also fear the environmental impact caused as a result of cryptocurrency minning especially networks like the Bitcoin own which takes up high energy and emits carbon in the process and this they feel is too much for any one thing, I mean there is concern over the energy consumption of Bitcoin.

The energy consumption which they feel is too much for the power grid of the nation coupled with the harmful environmental impact makes most government frown on cryptocurrency and this is also why they fear cryptocurrency or why cryptocurrency use becomes a major concern to them especially due to its ethical issue.

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Conclusion

As we have seen in most cases sometimes cryptocurrency is banned in some places or Bitcoin minning stopped due to one of this reasons I have discussed on, so really government to an extent have a reasonable ground for concern but ofcourse at the end of the day they all know that cryptocurrency potential is really boundless and sure it's the future that's why many want to stamp it out while the truly wise ones are working a way around for co existence and acceptance of cryptocurrency.