Will Governments Ever Accept Blockchain-Based Cryptocurrencies?

[uprosefinmart]

At present, Bitcoin and several other forms of cryptocurrency are at least partly regulated by world governments. In fact, cryptocurrency is only illegal in a handful of countries including Bolivia, Sri Lanka, Ecuador, and Vietnam. The only question is, will world governments ever really recognize coins like Bitcoin as legal tender?

What Does Acceptance Mean?

For the most part, mainstream government acceptance of Bitcoin and other cryptocurrencies is a non-issue.

In the United States, Europe, and the UK, it is already possible to buy everything from a cup of coffee to a family home using cryptocurrency. What many people, therefore, mean when they ask if cryptocurrency will ever become more widely accepted is, will governments themselves ever transition to using digital currency?

Why Governments Won’t Transition to Blockchain-Based Cryptocurrencies as we Know Them

For the foreseeable future, it is unlikely that governments will ever consider cryptocurrency equivocal to government-issued fiat cash. Moreover, this is mostly due to the potential for tax avoidance.

In the United States alone only 100 people out of a sample size of 250,000, could be evidenced as declaring cryptocurrency capital gains on their 2018 tax return. What is more, decentralized cryptocurrencies like Bitcoin interfere with more than just tax collection:
Privacy coins like Monero are still used to facilitate crime and other dubiously legal clandestine activities
Decentralized mining of coins like Bitcoin, make it impossible for governments to control their own money supply and policy
Cryptocurrency is still not backed by anything tangible
Digital currency is inherently deflationary, whereas governments depend on inflation to encourage economic growth

A much more significant problem also rests with the fact that many governments still don’t fully understand how coins like Bitcoin work.

Governments May Become More Accepting of Cryptocurrency Eventually

While world governments might be unwilling to embrace cryptocurrency itself, the same is not true for the blockchain technology which underpins how coins like Bitcoin work.

At present, the UK and the United States already settle international payments via a Ripple XRP payment gateway. Moreover, the Ripple Foundation is regularly invited to attend major economic summits like Davos and Europan Central Bank conferences discussing the future of retail payments.

Governments Don’t Like Decentralization

In Venezuela and Zimbabwe at present, out of control hyperinflation is resulting in rapidly declining living standards. In both cases, the official adoption of cryptocurrencies like Bitcoin could help tackle hyperinflation head-on. However, governments don’t like centralized coins. Hence why Venezuelan President Nicolas Maduro has insisted on creating his own national form of cryptocurrency, the Petro.

Government Issued Cryptocurrencies May Eventually Become Commonplace

While it might be difficult for Bitcoin purists to accept, the first step toward national acceptance of cryptocurrency will likely rest with governments issuing their own centralized blockchain. Coins like Venezuela's Petro may, therefore, eventually become commonplace. However, top coins like Bitcoin will likely survive as they do now on the regulatory sidelines.     

[Ailmand]

That is why most government doesn't want crypto due to decentralization. They cannot tax transactions that are anonymous and something they have no control of. Instead of peole using banks for their huge money transaction, people opt to use bitcoin for convenience where the government is not aware of.

[Abal Abal]

this is a difficult step that makes the government hard to make decisions, the reason is simple, namely the income. if bitcoin and atlcoin are still in a state of decentralization the government will not allow bitcoin, because they cannot collect taxes anywhere and anyone.

[pawanjain]

Governments don't like cryptocurrencies since they think they can't make profit out of it. Although they are not against blockchain technology, most of the governments have not accepted cryptocurrencies yet.
Good things take time and I believe crypto will also take a significant time to be accepted globally. Things were not so good in the beginning days of crypto but it is now.
Many tech companies are implementing blockchain solutions which is creating more awareness of blockchain and crypto towards people and if things go positively then governments might start accepting cryptocurrencies soon.

[fudster]

If Petro succeed many will follow its foots steps. Governments may not like decentralization but they also want control at the same time, and its blockchain that has it which they can track everything, identifies all of the users in the richlist. what else can they want from the blockchain when everything is visible to them.

[JohnBitCo]

That is why most government doesn't want crypto due to decentralization. They cannot tax transactions that are anonymous and something they have no control of. Instead of peole using banks for their huge money transaction, people opt to use bitcoin for convenience where the government is not aware of.

I do not know about other governments, but the government in my country is totally against crypto. Even they have stated to arrest people who are found in trading and mining business. Although these steps cannot prevent people to stop using crypto but overall this is not a good step for the governments.

They should accept the challenge of crypto currencies rather than just blocking it.

[gantez]

This is about adoption and so many countries have not started considering that. So accepting blockchain based cryptocurrency means relinquishing control of digital currency. Maybe they could look at ripples

[traderethereum]

That is why most government doesn't want crypto due to decentralization. They cannot tax transactions that are anonymous and something they have no control of. Instead of peole using banks for their huge money transaction, people opt to use bitcoin for convenience where the government is not aware of.

That's right. The governments need more income to grow their economy, and they cannot get the taxes from cryptocurrency, but actually, I think they can get taxes from the money that is transferred into the bank account. With that, I think the user still needs to pay the tax.
But I am sure that in someday, the governments will accept blockchain based cryptocurrencies and I think they will integrate the system with the blockchain. Maybe they are too shy to conclude that they are still learning about the blockchain. I think people are now afraid of paying the high fee transaction in fiat because they don't want to spend more money just to pay the transaction fee.

[CryptopreneurBrainboss]

If the government of any nation were to accept any blockchain based cryptocurrency I don't think they would be interested in any of the current ones, bitcoin especially won't be an option. The government are showing some positive sign toward utilizing the potential blockchain technology has to offer but when it involves cryptocurrency I'm not seeing much interest. If the government were accept a blockchain based cryptocurrency I'm sure it would be the one they developed themselves with some centralized features like XRP and EOS. The government always have this hunger for power and control, them accepting decentralized cryptocurrency would go against all they stand for "control freaks".

[mersal]

Definitely the possibilities are available for cryptocurrencies to connected with government and the banks that to be useful for them in the future only not today because there will be lots of currencies available for them to make their economy developed but in the future it will not been more powerful like Bitcoin at that time they were considering about the cryptocurrency system.

[playboy654]

There are lots of problems will came to the Government of any country while accepting the cryptocurrency based economic situation so if the complication was been solved by the government they will ready to accept it and it will possible now otherwise the future will be the solution for everything to decide which will be suitable for the government.

[bitbunnny]

I think they will and that is only the question of time. Cryptocurrencies can't be avoided anymore in digital world and governments know that. But they don't want to rush and they are trying to find the best possible way for regulation and introducing cryptocurrencies in the regular financial world. You can't escape the future and governments are aware of that although sometimes it doesn't look so.

[mrdeposit]

I guess governments are negative about this. They love the centralization which does not related to blockchain based cryptos.
Also, we need more time for acceptance. Maybe it would be a better system by then.

[LUCKMCFLY]

Somehow they must accept it, because many operations come from cryptocurrencies, they are easily portable to the traditional economy of a country, in fact, only one country tried to take out a cryptocurrency, which has failed completely since its creation, as it did not have the adequate development, but governments know that part of the future is there, the digital age is a fact, everything is given for that to be the highway of progress.

I think that at the economic level it is not advisable to accept adopting cryptocurrency in the traditional economy, because most economists will never recommend investing in a totally volatile market, the fear of losing funds is imminent, usually in a government or in the banking sector. accustomed to placing their money in safe investments, that from time to time bullish tendencies arise very difficult to fall, the speculative market of Bitcoin, at any moment it can collapse and recover, the volatility is what will never fit the banks and to governments.

[rizkyhiw]

Decentralization is something most avoided by the government because they want to take advantage and also get full control of all those who hold crypto, there are good and nothing good because they are against the government, but I think they also have to take a stand to avoid crypto criminals because that is quite worrying and is not well controlled by anyone.

[BlackPanda]

We have to wait for all that, I think it's only a matter of time. I am sure the government is sure of blockchain technology and the government has also believed in the benefits of Blockchain technology. Maybe in the next few years we will be able to get information that the government recognizes Blockchain technology and even regulates crypto as a whole.

[drgomez89]

in the end it does not depends on the government, If the acceptance of the people keeps growing they are not going to have options. They will have to adapt to the way the times are changing just like they did with the internet, the cellphones and the social network. They had to make regulations because they cant control the behaviour of the people.. They can only ADAPT TO IT.

[cryptic4000]

We have to wait for all that, I think it's only a matter of time. I am sure the government is sure of blockchain technology and the government has also believed in the benefits of Blockchain technology. Maybe in the next few years we will be able to get information that the government recognizes Blockchain technology and even regulates crypto as a whole.

If there is government trust, surely a new investment community will appear because the government is a solid fulcrum for developing this Blockchain technology. It can be seen recently that many large countries are showing signs of recognition of this technology and I believe that the issue of time will soon be resolved in the next few years. In my opinion, Blockchain brings many good things for everyone so please apply it as soon as possible

[frankcastle19]

goverments don't like decentralization, but soon or later they will accept crypto

[gabmen]

We have to wait for all that, I think it's only a matter of time. I am sure the government is sure of blockchain technology and the government has also believed in the benefits of Blockchain technology. Maybe in the next few years we will be able to get information that the government recognizes Blockchain technology and even regulates crypto as a whole.

If there is government trust, surely a new investment community will appear because the government is a solid fulcrum for developing this Blockchain technology. It can be seen recently that many large countries are showing signs of recognition of this technology and I believe that the issue of time will soon be resolved in the next few years. In my opinion, Blockchain brings many good things for everyone so please apply it as soon as possible

And probably they will. It's not necessarily just bitcoin but several crypto coins have specific usess other than for transaction. And blockchain tech is now becoming widely accepted as an innovation on how we may run things in the future.