Bitcoin Forum

Some people keep saying they want Bitcoin to become a legal tender, like it’s the ultimate goal for adoption. But they don’t really think about the negative side of it.

If Bitcoin becomes legal tender, that means government control, taxes, KYC everywhere, and eventually, less freedom.. the very thing Bitcoin was created to avoid. Once it’s “official,” it stops being decentralized money and starts acting like another regulated digital peso or dollar.

So before we wish for it, maybe we should ask, do we really want Bitcoin to become legal tender, if it means losing the privacy and independence that makes it special in the first place?

i believe it depend on the country if they are a real supporter of bitcoin or just riding the wave of its popularity

for me bitcoin being a legal tender may just entail that we can now use bitcoin for a lot of transactions in the country but it doesn’t mean we have to use kyc platforms ourselves. if the country isn’t that strict, they wouldn’t be checking around

There are standard rules that have to be followed, just like the KYC law and the Anti-Money Laundering law. So regardless of which country it is, once Bitcoin becomes a legal tender, those regulations will be implemented based on international standards. Everything I’ve been saying is bound to happen, you’ll see.

First time seeing someone aligning with my view in this matter. I had always said that bitcoin does not need to be a legal tender in any country in other to be adopted or hit massive adoption. If there was to be a referendum in my country voting bitcoin to be legal tender, I will actually go against such a vote. This is why I was happy when the United States of America instead of making Bitcoin legal tender, the used it as a strategic reserve.

Bitcoin has shifted from being a currency to an investment asset and I think that status is okay for it because we are actually seeing bitcoin as a digital gold instead of a digital currency.
In a nutshell, we do not need the government of any country to make bitcoin a legal tender. Just don't illegalize it, allow it it to coexist with the fiat and we are fine with it.

All these things are already going o right now. There is a lot of regulation and KYC everywhere right now. Being legal tender won't change that. I don't believe governments of various countries will make bitcoin legal tender, and I'm not even asking for it, but regulations are KYCs are not my reasons.
Whether the government accepts it as legal tender or not, Bitcoin will always be decentralised; it's the usage of Bitcoin that can be centralised, so as long as the government doesn't make it illegal to use decentralised systems like non-custodial wallets and P2P, those who want to use it will use it. Governments cannot control Bitcoin; they can only control how, or should I say, the means with which people use it. Bear in mind that even without being legal tender, there will be even stricter regulations on bitcoin in future.

Seeing it as a legal tender, it would be an advantage for those who never take take bitcoin as a serious investment. However for us who are really optimistic about bitcoin, it could deprive our privacy and personal interest, and we don't want it to happen. Instead, we want only to gain high privacy for bitcoin that can only be possible if bitcoin does not become a legal tender, if bitcoin won't be a pet for the government and centralized institutions that are only after for their selfish gains and interest.

And if Bitcoin doesn't become a legal tender? Would there be no tax? Would the government not require companies to impose KYC to their users? Would there be freedom? I don't think so. What you're worried happening when or if Bitcoin becomes a legal tender will happen or are in fact already happening even if Bitcoin isn't a legal tender yet. The government being the government will always pursue taxes and KYC and whatnot.

I think the ultimate adoption for Bitcoin isn't becoming a legal tender; it's becoming the main E-commerce currency. That's what Bitcoin is for.

The government is starting to control bitcoin now, that's why we are seeing set of regulations and restrictions towards bitcoin, thus limiting our privacy even if we say we are the real owners of our bitcoin. So how much more if the global adoption happens and we are out of control of our hard-earned bitcoin, that could be the worst scenario then, but we should always be prepared for it.

Bitcoin's innovation and success are becoming inevitable, and so is the government policies and regulations intended for bitcoin. So the best thing we can do now is to protect our bitcoin and give the utmost security so that it won't be a new target of the government. Although the global adoption is not really as a legal tender but as a co-currency with the existing official currency, still the government's control will be very tight then.

Even if bitcoin doesn't become legal tender and it is just legalized as an asset, commodity like what is happening. The government will also try to find ways to control, impose taxes, KYC everywhere, and they have been implementing them for a while. Don't you see?

That is the price we have to pay for wanting to legalize bitcoin and get government support to promote its popularity globally. Whether bitcoin is used as a currency or an asset, regulation is inevitable.

I wouldn't be surprised if in the future, governments ban the use of non custodial wallets and force us to use centralized services and custodial wallets to store bitcoins.

I think sooner or later it will become legal tender, and the argument that you already put up? It's been happening already, tighter regulations, taxes KYC and we have been tracked already. So there's not much of a different to be honest if it become legal tender or not. It's been like that in the last 5 years already, even banks now are accepting crypto or Bitcoin already. So as much as we hate to see it, right now it's very hard to keep your privacy and independence. I guess this is part of the bargain that when crypto goes to the mainstream, there will be something in the middle for the government to make it work for them and for us.

Between our wish and reality, there are big differences and we can not control what governments do so let's deal with it, accept this reality and move on towards the future with more and stricter regulations on Bitcoin.

Fortunately, Bitcoin is Bitcoin, decentralized, censorship resistant and it can give us some sort of privacy and anonymity, depends on our own practice. If we can learn, become knowledgeable about Bitcoin blockchain and Bitcoin wallets, we can choose good Bitcoin wallets, use Bitcoin addresses, UTXOs well, then we can achieve good privacy and anonymity. Governments can not prohibit us from such good practice for our own benefits.

Bitcoin privacy guide. (https://bitcoiner.guide/privacy/)
Bitcoin privacy resources. (https://www.lopp.net/bitcoin-information/privacy.html)
Protect your privacy. (https://bitcoin.org/en/protect-your-privacy)

Would be cool if Bitcoin was just widely accepted by any/all just as gold or silver is and has a good solid option for taking payments,
 But I feel like we have already achieved that status. Bitcoin really is a form of currency today but its not yet money and utilized in the way money is in markets yet as a medium of exchange but I do think its getting there

For me, this is kinda optional. There are still a lot of people who are using Bitcoin without doing these types of KYC or interacting with the government or any companies.

But yeah, day by day, these entities are always making a scene or a distraction to the "decentralization" of Bitcoin, especially the government itself, which we can't blame also as they are just doing their job to protect their people.

I don't think so. Bitcoin could become an alternative payment method and will be used more in international payments. Or it could go further and become part of national reserves like gold. But expecting it to become a global legal tender, that will never happen.

Because using a decentralized currency would pose risks to the current centralized financial system. If bitcoin becomes legal tender, banks will lose control of the currency and that means they cannot regulate the economy. This would cause instability and could lead to economic collapse, among other problems.

The future of Bitcoin is as a store of value, not as an everyday currency, IMO.

Others also think the opposite, and that it would be much better if Bitcoin became legal tender, and under that condition, the government couldn't fully control it.
Unless we're talking about taxes or tightening regulations on exchanges, because that's part of what they might do.
In certain interests, people can make judgments about whether it's legal tender or limited to investment use, but if there's no chance, we'll probably accept anything.

Whether it's legal tender or not, the government also benefits from taxes, especially the involvement of exchanges as a place for people to buy and sell bitcoin.
That means this has happened and we even see many exchanges starting to be granted permits, especially those related exchanges local ones.

Before, we were free, uncontrolled because bitcoin and cryptocurrencies were so small, the government didn't care, not because they couldn't control us. But over time, as bitcoin became more and more popular, they could no longer ignore it. Therefore, it can be said that taxes, KYC, control are inevitable whether bitcoin becomes legal tender or not.

Although bitcoin is a decentralized currency, at the end of the day it is just a small part of world, and the government is the one that controls this world. That is why whether we like it or not, there is no way to stop their interference.
Let's say even if we all oppose bitcoin becoming legal tender, is there any way we can stop them from doing so?

All these shouldn't be a reason to why we should not see them approving Bitcoin a legal tender status, they know what they are doing, bitcoin will still remains the same decentralized network and government cannot regulate it by themselves, their fear is when it takes their power away from them and everyone becomes independent in their finances.

Tax is something that we should all be expected to pay, but does that also have to come into Bitcoin use? I will say no, because I don't have to pay tax before spending my earned fiat currency, why should I on bitcoin, maybe exchanges and other physical establishment can face something related from the government regulations, which is not bad, as they are also making business from us.

Governments are already doing those things you mentioned, you have choices to choose no-KYC approach by using decentralized services and staying in bitcoin ecosystem or using CEX where government impose KYC.

If government is legalizing bitcoin and considering it as a legal tender, I doubt the situation will be different than what it is now.

If Bitcoin becomes Legal Tender, it will do more harm than good and its main role - freedom and privacy will be lost. There is no point in making real development by calling it Legal Tender in the current adaptations that exist all over the world. In fact, the real beauty of Bitcoin is inherent in its blockchain and decentralization, so there will be no need to do anything new, if it continues like this, it will be fine.

Satoshi's main objective was to create Bitcoin as government-free and permissionless money, i.e. no one will be able to stop or seize anyone's money. The strength of Bitcoin is not in being legal tender, but in surviving as freedom of money. So whether the government wants to accept it or not, people should use Bitcoin as they want, that should be the real goal, i.e. mass adoption through individual choice, not government enforcement. So now Bitcoin developers and miners should protect Bitcoin from becoming another digital fiat.

That will depend on the government because they have the power over whether something becomes legal tender or not. But with the nature of Bitcoin that no one can control, I don't think the government will easily decide. They need to discuss with all parties how they can benefit from it. They can control the user but not Bitcoin so that is why they impose KYC on those who use Bitcoin in exchanges. I can accept and don't mind if Bitcoin becomes legal tender or just something that we see today. You can still use decentralized system if you want as long as the government allow that. The thing is we should not break the law of our government.

Bitcoin's decentralization persists despite regulations and KYC. Governments can control usage, not Bitcoin itself, and stricter regulations will likely follow.

Maybe the ultimate goal for wanting that situation to happen is to create a consistent demand for Bitcoin especially if it happens that Bitcoin will became a legal tender there would be more accumulations will happen on Bitcoin.

But we cannot really erase out some facts that there are drawbacks especially that price is so volatile and regulation is always uncertain especially that politicians are not permanent on their set and they might sudden shift of regulations that can affect Bitcoin and those people who hold it on those countries which make it a legal tender.

But let see what happen in future although all of us are just speculating about the possible outcome of this legal tender things.

We have seen that El Salvador has recognized Bitcoin as a legal entity, but they cannot control Bitcoin in any way, and may not be able to in the future. We know that Bitcoin will never be controlled by any person or any country, it has a limited supply that cannot be increased even if we want to. We can currently transact Bitcoin without any KYC and through our own anonymity, which is very easy. But if in the future a country controls Bitcoin through such technology, then of course the value of Bitcoin will gradually decrease.
So I think that Bitcoin may never be controlled by anyone, but it will be accepted by more people in the future and its demand will increase, people will only complete transactions with Bitcoin in order to protect their own privacy. And yes, we know that Bitcoin is an independent currency and it protects the privacy of each person, so it cannot be controlled by any country in the future.

The Bitcoin Legal Tender progress in El Salvador has not been smoothly and even their local citizens don't feel happy with Bitcoin legal tender in their nation while they are not ready to accept bitcoins from customer payments and can not hold coins a long time for avoiding price volatility. If they quickly convert bitcoins to fiat currency or stable coin, they have to bear some loss from conversion fee while perhaps customers are not ready to be charged that extra fee.

Then IMF forced El Salvador to stop Bitcoin Legal tender policy in that nation.
What's the status of Bitcoin in El Salvador after its IMF deal? (https://cointelegraph.com/news/el-salvador-bitcoin-status-btc-law-amendment)

If given the choice again, I believe people would still want bitcoin to become legal tender. Because what people are looking for in bitcoin is not privacy or freedom but the profits it brings.


People want bitcoin to become legal tender because they believe that by doing so, the demand for bitcoin will increase and reach its peak in terms of adoption. From there the price will increase sharply and they will make huge profits.

Don't put them in your shoes, do the opposite and put yourself in their shoes, you will see that the needs of the crowd are not what you think. Not many people care about privacy or freedom as much as they claim to.

People who don't have any need for privacy and freedom that comes with holding Bitcoin wouldn't mind it being a legal tender, they will be happy to do any KYC requirements, follow government regulations to the latter and be taxed as the government wishes. For us who value the intention of Bitcoin creation which is decentralization, to be an alternative to fiat globally and to be used for p2p transactions without government interferences. Bitcoin as a legal tender has it's advantages like fast adoption in the country, that is the main advantage that it has. But I will prefer a government to hold Bitcoin as a strategic reserve like gold instead of making it a legal tender, they will want to regulate it like their traditional currency.

It would happen with or without us wanting it that much, imo.

As it was said - depends on the country in question.

I am just like you but unfortunately we are not legions, and that's sad, there are too many people that believe in legal tender, they are the type that waits for the authority orders before they can make a move on anything, Bitcoin as a digital gold is far more welcome by me than Bitcoin as digital currency as it will just open door to more control by the centralised authority, and we will be miles away watching as decentralisation fades away forever.

Bitcoin can be use as means of settling payment as some merchants are already offering the option and it needs to stay this way only, there is no need to turn Bitcoin into some form of money that must be accepted by force, this will spell more trouble to decentralisation.

This would be foolish steps for a human. We all know that the very idea of creating bitcoin was peer to peer seemless transaction without having the involve of middle man. Which excluded the very idea of banking channle transaction. But if we're gonna accept the monitoring through government it would not be ideal for bitcoin. Satoshi himself didn't created this for this reason.

This will create an artificial problem in Bitcoin technology, and despite getting popularity it could loose it's popularity. But if government officially accept bitcoin without imposing any regulation and let it be as it is now then I think the popularity of bitcoin could sour to sky rocket.

I don't think the structure of BTC would change, rather perception of it and, yeah, control of where your coins go, that's the main thing.

It can already be seen and tracked, but on this gov scale - it's not the way for BTC ;D Adoption cannot go forward without regulations, though.

If Bitcoin legality in their nation is Illegal, it's clear that they should not do anything with Bitcoin especiallly at business level.
If Bitcoin legality is either Allegal or Unknown, they can do something with Bitcoin for their business but surely there are concerns that they should not do anything, and wait for the legal status becomes clearer.
If Bitcoin legality is good as Legal or Legal tender, no more concern about punishment from governments but then there are other uncertainties on effectiveness of Bitcoin acceptance for their business.

If the acceptance is forced by governments and legal tender, not all business and people are happy when accepting Bitcoin.

Perhaps you don't understand how Bitcoin works, because that still doesn't change the technical nature of Bitcoin and what you can do with it because of that technical nature. 8)

How could the government stop me from purchasing Heroin using Bitcoin, a decentralized/censorship-resistant cryptocurrency, from the Dark Markets whether Bitcoin is legal tender or not legal tender? THEY CAN'T!

Taxes and kyc already exist in the network and the government are also constantly fighting privacy. All of what you think would happen if many countries make BTC a legal tender is already in play right now. Where you get it wrong is that nothing can change the protocol, nothing can make BTC centralized.

However, i do not care if governments make BTC a legal tender in their jurisdiction, that decision is ultimately up to them and the BTC community do not have any say or sway in it. So why worry about things that are out of our control, BTC functions fine without being a legal tender. As long as it is not banned, you can spend it, the other party just has to be willing to accept it.

Ofcourse they won't, otherwise it becomes like making a foreign currency they don't control a legal tender. And it will be worse for them to make bitcoin a legal tender than say a desirable fiat, due to the fact that Bitcoin operates contrary to fiats while fiats operate in similar ways. So they will most likely be tempted to control it else they won't be able to sustain a possible legal tender statue.

Bitcoin currency is better suited for independent, transparent, moral and free society that operates opposite of world's system. The fiat people are free to use it, especially for international transfers & investments. But it will be specially prioritized for the economy or financial system of an alternate society. In such economy, people will transact mainly with Bitcoin, both online and offline. The society will have knowledge centers, hospitals, shops, markets, institutions, industries, companies, etc that accept bitcoin as legal tender because Bitcoin is in harmony with their culture. This is the direction developers and general Bitcoin community should be moving towards rather than world's system.

Well, aside from having government control, KYC everywhere and less freedom, once bitcoin becomes a legal tender, hence we will be force also to spend our bitcoin and treat it just like a normal currency like USD, so the essence of having bitcoin as an investment will slowly become undervalued as majority of the people will now be using bitcoin as a legal tender.

When that time comes, though bitcoin supply and demand continue to increase, but not as a profitable asset but as a currency, as a legal tender. In the end, the government will only gain the best advantage of bitcoin as a valuable asset while leaving us having bitcoin as a commodity, as a medium of economic exchange.

Indeed if we look deeper there are pluses and minuses, but that doesn't mean eliminating the decentralized nature, and in my opinion, legalizing bitcoin as a legal means of payment is much more profitable because it will encourage mass adoption which will slowly stabilize bitcoin, of course it doesn't have to eliminate the fiat system because after all, fiat cannot be completely eliminated and bitcoin is only another option, besides that, strong legality doesn't mean killing bitcoin, in fact, with legal recognition it can be a shield for bitcoin, sometimes to protect something from power, we need to make it recognized by that power and nothing in this world is completely free from regulation.

Legal tenders currencies like our is controlled by the government, they can decide to print this local currencies as much as they want and enforce any laws that they want but in regards to Bitcoin, they can not produce more Bitcoin above the total supply, which will still make the value of Bitcoin to grow so high bringing more and more main stream adoption but while the growth spikes, the government will intensively scrutinized Bitcoin and its users, that will reduce privacy protection and anonymity of Bitcoin users to nearly nothing.

The KYC procedures are already going on even with countries that haven't made bitcoin a legal tender but seem to be crypto friendly with laws that doesn't prohibit their citizens from using bitcoin. It's at the moment you use centralized financial platforms that you would be asked to do KYC, right? So that means even with or without the country making bitcoin a legal tender you would still encounter some regulatory measures and KYC the moment you move your bitcoin from a self custody wallet to a centralized platform.

Now it's not much different than what you said above:

Government control (banks/CEXs block specific UTXOs/addresses).
Taxes.
KYC everywhere (CEXs, digital money etc).
Less freedom (discouraged to use unlicensed exchanges).

Without Bitcoin become legal tender, Bitcoin was already like that since the second halving season and it get worst after ETFs launch.

But we are already in the same era right even without bitcoin being a legal tender?

We are forced to do KYC on regulated platforms, and you need to pay taxes on gains and the only difference is it is not under direct control of anyone which will remain the same even if they made bitcoin as legal tender. The only reason I wish bitcoin to become a legal tender is then we have an option to pay and everyone will have bitcoin is accepted here which I think is the real adoption of bitcoin as currency.

Is there anything that you have made mentioned that has not been done even when legal tender hasn't been accepted yet? Bitcoin may not become a legal tender to some financial influencing countries but if you are going to make use of Bitcoin, you are going to use a KYC. I'm not sure there is any tier A exchange in crypto that let you use their exchange without a KYC requirement because they don't want to get be reported as a non compliance exchange, they all trying to avoid been sued and label as criminals violating money regulations.

Legal tender isn't going to change anything about decentralization. It's not going to stop freedom and it's not going to be government control because this things already existed even before legal tender came and I can't tell you this legal tender will take years of our existence before it can become actualized, the chance are very slim. Why do you think a country will make something a legal tender when they don't plan on buying such asset, it doesn't make any sense.

What makes you think that Bitcoin's decentralization will be compromised if it becomes a legal tender? That has nothing to do with its decentralization, because decentralization is in its network, and even if it becomes a legal tender, the government can't control its network, and that's what decentralization is all about. KYC can only be implemented on platforms or things that are generally centralized and allow them to control everything, but Bitcoin's network can't be controlled; the transactions, blocks, or anything can't be specifically controlled or filtered.

That being said, Bitcoin becoming a legal tender doesn't really boost its adoption, because that doesn't specifically make more people adopt and use Bitcoin but only the ones who already use it will use it more often when it becomes a legal tender, and the reason for that is that when Bitcoin becomes a legal tender, fiat currencies don't get banned, so most people will still use fiat currencies, look at El Salvador, do you think all the people in there use Bitcoin because it's a legal tender? No, most people still use fiat. :)

Bitcoin being a legal tender don't really matter in my perspective,we just need the government to have a friendly approach towards Bitcoin.Just like what you said bitcoin being a legal tender isn't the ultimate goal for adoption,I just flashed back to when the government in my country was against Bitcoin,but my country's name never stopped appearing on the list of the top 10 countries promoting it's adoption,that alone shows that legal tender isn't the ultimate goal for adoption in regards to Bitcoin.But if any country wants to adopt it as their legal tender it isn't a bad decision.

Legal tender wouldn't hurt your privacy; when you store Bitcoin in a noncustodial wallet, the government can't control it. Legal tender means you will be able to use your Bitcoin everywhere in your country. Whenever you want to pay Bitcoin for something, the second party is forced to accept it. It's like when you are now buying goods and paying with fiat, then the shopkeeper must have to accept it. Even if the government launches their own wallet system to control you, it isn't necessary to move all the Bitcoin into the government-issued wallet.

Imagine you have been using a crypto debit card. Do you transfer all the funds to the card? I don't think so. You just move whatever amount you need; at least I am doing the same thing. So you can follow similar strategies for your Bitcoin with a government-issued wallet or exchange. Still, you are sharing our KYC with third parties like exchanges and gambling sites. You are safe if you can secure your Bitcoin right away.

For one, Bitcoin is still a very volatile asset and lack monetary control and that's why it may be rather difficult for countries to adopt it as a national currency of choice over traditional finance.
It is better and more preferred as a great store of value that promises privacy from third parties for now against the backdrop of rising inflation for economies that are having financial crisis and if we were to learn from El Salvador, we would see that an unprintable supply of Bitcoin as a paper currency, far out weighs the risk of adopting it as a legal tender.

If Bitcoin doesn’t serve the purpose of being a legal tender, then it doesn’t fully certify as a p2p currency for which it was its intent by its creator.

You indeed raise a good argument though, that regulations does mean centralization. If I’m taking that out of context then, I beg your pardon and would have you correct me.

I wouldn’t base decentralization on regulations though. Bitcoin can’t be regulated but aspects of it is what can. That means, you can regulate how people use it across certain channels but it is in fact these channels that are being regulated and not Bitcoin.

Should Bitcoin function independently of exchanges and move from one non-custodian  to another as it out to be, regulations would have no means to have any effects there.