[2018-02-06] Hindu: Fearing cryptocurrencies

[polynesia]

Fearing cryptocurrencies

http://www.thehindu.com/opinion/op-ed/fearing-cryptocurrencies/article22661656.ece

The hope that private cryptocurrencies would become mainstream money suffered a setback last week. In his Budget speech, Finance Minister Arun Jaitley for the first time explicitly said that cryptocurrencies such as bitcoin are not legal forms of money in India and that the government would take steps to eliminate their use. Mr. Jaitley is not the only politician worldwide to consider cryptocurrencies a danger to the status quo. Under the guise of protecting investors, governments in China and South Korea recently took steps to suppress the use of cryptocurrencies, thus adding to the extreme volatility of their price moves. Why are governments so keen to destroy private cryptocurrencies?

The reason is that these currencies pose a significant threat to the massive economic power that national currencies, such as the rupee and dollar, provide their governments. Today every country’s government has a legal monopoly over the issuance of the currency that its people use. This means that no entity other than the government may create and sell currencies. The very point of legal tender laws is to ban anything other than the currency issued by the government from being used as a medium of exchange.