[2017-09-10] Can Any Government Ban Bitcoin?

[Slow death]

Can Any Government Ban Bitcoin?

Bitcoin has been around the fringes of financial markets for less than a decade, but is slowly gaining prominence as an alternative asset class. Can the government of any major country step in and do the unthinkable – ban Bitcoin?


Flashback – Holding Gold Bullion is a Crime

Those who think that no government (except those run by tinpot dictators) would take the extreme step of banning Bitcoin need a lesson in history. There was a time when holding gold bullion was a crime in America, punishable by a sentence of up to ten years in prison. In 1933, American President Franklin D Roosevelt issued an order requiring all Americans to hand over their gold holdings to the Federal Reserve Bank. The ban on owning gold remained in place for more than four decades, before President Ford legalized gold ownership. This move was made easy by the fact that America had abandoned the gold standard a short while prior and hence had no need to own vast quantities of gold to back up the amount of currency it printed.


The Great Chinese Firewall


Another oft-repeated argument against a ban on Bitcoin is that in the age of the globalized internet economy, individual governments lack the authority and power to act against a decentralized currency like Bitcoin. However, we only have to look at how China has bent even the Internet to realize that this is not the case. By a mix of government legislation and the blocking of popular foreign websites by the Chinese internet service providers, the Chinese government has tried to limit the Chinese to a walled garden, instead of viewing the whole world wide web. Traffic monitoring tools are used by the government to stifle political dissent. Taking a step to ban Bitcoin would not be too large a leap for the Chinese government.


India and Demonetization


If you think that fiat notes, printed by the Government and certified by the Central Bank, would be the last thing to be banned, think again! The Indian Government issued a decree in November 2016, stating that high denomination notes would cease to be legal tender almost immediately. Indian citizens had to queue up in banks to deposit old currency notes. Getting hands on the replacement currency was not easy, leading to huge queues at ATMs. This demonetization was touted as a means to curb income tax evasion and solve most of the government’s problems. Almost a year later, it has become evident that demonetization has failed to achieve the government’s objectives and has only resulted in an increase in the demand for Bitcoins.



Enforceability Issues

If a government decides to make trading or possessing Bitcoins illegal, questions will be raised about how exactly it will enforce such a ban. It is impossible for a government to seize your Bitcoins, unless you decide to handover your private keys. However, the majority of citizens and institutions like to stay on the right side of the law. So the demand for Bitcoin would plummet if the government decided to ban it. All exchanges in that country would also be shuttered and buying/selling Bitcoin would be difficult and risky. This would suffocate Bitcoin in that country and the government’s objectives might be achieved.


https://cointelegraph.com/news/can-any-government-ban-bitcoin

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[Kprawn]

A ban can happen, but it would be a foolish move from these governments. Why would you say NO to a payment method that

are being used globally? This will influence tourism potential for these countries and they will also get less tax because of this.

Bitcoin users will just go underground and move to countries where bitcoin is illegal. A lot of capital will leave these countries,

because it cannot be spend locally. 

[Xavofat]

To answer that question you have to understand what motives they would have to ban Bitcoin.

1.  The reserve currency has to be held by the central bank if they intend to back fiat currency.  This is no longer a problem because banks don't back up their fiat currencies with anything anymore.

Even if they were going to back up their currencies with something, it seems likely they would stick to gold.

2.  Illegal goods.  There's no reason why banning Bitcoin would prevent criminals from using it, because they would just handle it anonymously and buy it peer-to-peer with cash.

They would mainly just prevent legal activity by banning it, so it seems like they don't have any good motive.

[Taki]

A ban can happen, but it would be a foolish move from these governments. Why would you say NO to a payment method that

are being used globally? This will influence tourism potential for these countries and they will also get less tax because of this.

Bitcoin users will just go underground and move to countries where bitcoin is illegal. A lot of capital will leave these countries,

because it cannot be spend locally. 

Doubtless it is going to be stupid for the government to block such the duck bringing golden eggs as bitcoin. But I think it is really can happen in the case of it is going to be proved that bitcoin was used for organization of some big  a terrorist attack, no matter that the US dollar could be used for the same target or some other currency, cause of they cannot ban dollar, but they can do it with bitcoin.

[CryptoBry]

Of course, it is quite possible that a government will totally ban the use of Bitcoin especially those under their control and we know that there are governments who are very creative in gaining control of their people. The recent example in China when it banned all ICOs is showing us that those who are ordered have no choice but to follow because it can be worthless fighting the government.

In other words, for all the theories that Bitcoin is beyond the control of the government, yes you can hide Bitcoin for ages and maybe just forget about them but you can not openly use it once the government will ban its ownership and exchange. In the end, under this struggle, it would be the government that will win and Bitcoin (as well as the users/owners) as loser.

[bouren]

Of course, it is quite possible that a government will totally ban the use of Bitcoin especially those under their control and we know that there are governments who are very creative in gaining control of their people. The recent example in China when it banned all ICOs is showing us that those who are ordered have no choice but to follow because it can be worthless fighting the government.

In other words, for all the theories that Bitcoin is beyond the control of the government, yes you can hide Bitcoin for ages and maybe just forget about them but you can not openly use it once the government will ban its ownership and exchange. In the end, under this struggle, it would be the government that will win and Bitcoin (as well as the users/owners) as loser.

Yes, government can easily put control over most of the Bitcoin transactions by simply passing resolution of single page. A single page of oder has a power to halt working of all exchanges as well as wallets in country and ultimately users will left prone to legal punishment if found using BTC.
No doubt black market exists everywhere so will be of bitcoin but it will completely going to fuse the bright bulb of bitcoin!s future.

[veleten]

of course,they can,Venezuella anyone?
but there must be a very very good reason to do that,otherwise its shooting yourself in a foot
banning bitcoin you remove one of the fastest growing markets and restricting yourself to conventional payment methods
with bitcoin ban comes all of the cryptocurrencies ban,so there will be black market
it will result in more cryptocurrency related crimes if nothing else
 

[QueenW]

To forbid bitcoin by itself will not work, unless if you immediately ban all the Internet at once. But the criminal liability for exchangers for Fiat is quite real.