Can governments crack down on crypto?

[Vincom]

In its early days (around 2009), Satoshi Nakamoto envisioned BTC as a replacement for fiat in everyday transactions. However, today, BTC and many other crypto function more as a store of value, similar to an investment. Their price fluctuations offer profit potential but also contribute to gradual inflation of crypto relative to fiat. This dynamic becomes even more complex when people choose to hold crypto assets like BTC, ETH, or USDT instead of fiat. This behavior stems from the belief that fiat are losing value over time, while crypto are expected to appreciate.

The rise of crypto has the potential to significantly impact the role of fiat in the global economy. This could challenge governments' traditional control through mechanisms like money printing. Governments are taking various approaches to this new reality. The EU, for instance, has adopted a regulatory stance with the introduction of the MiCA law ^[1]. China, on the other hand, has opted for a stricter approach, aiming to ban crypto entirely ^[2]. The situation in Nigeria is more fluid, with the government's position yet to be solidified ^[3].

The Nigerian government recently took a hard stance on crypto, accusing it of contributing to the decline of the naira's value. This resulted in a ban on all crypto exchanges operating within the country ^[4]. Specifically, authorities suspect Binance of being involved in a massive, $26 billion illegal money flow that has harmed the Nigerian economy. To investigate these claims, they arrested two Binance executives and demanded user data ^[5]. Binance maintains its innocence and has called for the executives' swift release. While cooperating with the ongoing investigation, the company denies any wrongdoing ^[6].

This incident highlights a critical question: how should governments regulate crypto exchanges? The rapid growth of this industry has exposed gaps in oversight around the world, leaving policymakers scrambling to catch up. The recent actions by the Nigerian government highlight the ongoing tension between governments and crypto exchanges. I believe Nigeria's recent actions towards crypto appear to be overly restrictive and may hinder the technology's potential growth in the country.

Crypto's decentralized structure ensures its existence independent of government approval. However, widespread adoption by governments is crucial for its robust growth. Government restrictions on crypto trading and CEXs can stifle market liquidity and discourage investor participation. This could hinder the influx of new capital and limit the crypto market's potential compared to more accepting environments, though DeFi and P2P transactions might persist.

The recent crackdowns on crypto in countries like China and Nigeria, despite crypto's inherent resilience, raise my concerns about governments' ability to stifle its growth within their borders. If this trend continues and other governments follow suit, the potential consequences for the global crypto market could be far-reaching.

Looking ahead, we need to see two key developments for crypto to flourish. Firstly, major governments should embrace crypto as a legitimate asset class by establishing a legal framework. This framework would allow for taxation of crypto income, similar to other investments. Secondly, the crypto community must strongly oppose and condemn any extreme measures aimed at stifling the market's growth.

I would like to know your views on the acts of repression of the crypto market:

• Can crypto continue to thrive without the support of governments?
• Do you think governments can suppress and restrain the crypto market with their power?
• If you were the head of government, would you accept or reject the crypto opportunity for your country?

References:
[1] MiCA, EU’s Comprehensive New Crypto Regulation, Explained
[2] China Never Completely Banned Crypto
[3] An overview of cryptocurrency regulations in Nigeria
[4] Nigeria targets cryptocurrency in bid to end naira freefall
[5] Binance Executives’ Detention Could Spark Diplomatic Crisis in Nigeria
[6] Binance says it trained investigators in Nigeria under government cooperation

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[goaldigger]

I would like to know your views on the acts of repression of the crypto market:

• Can crypto continue to thrive without the support of governments?
• Do you think governments can suppress and restrain the crypto market with their power?
• If you were the head of government, would you accept or reject the crypto opportunity for your country?

Definitely yes, the government has the power to suppress Crypto market and they've done this many times already.

Have you heard China banned cryptocurrency multiple times? Have you heard SEC decline the legitimacy of Bitcoin?

Well, look at them now they can't totally control the whole crypto market as other countries have their own different point of view and they have no choice but also to adopt or else other countries will take advantage of this market. If I'm the head of the government, as long as it benefits my country then I will support and accept it, regulations will be a big thing in cryptomarket.

[mich]

Well I think the governments will want to crack down on it. But we must ask our self if it is possible for them to really do it.

China has trued to ban crypto and some other countries too. But the thing about that is you can not ban or crack down on crypto. 

The only thing they can do it try to regulate it to control it. And they are doing that now since crypto is becoming more popular.

[Bureau]

• Can crypto continue to thrive without the support of governments?
• Do you think governments can suppress and restrain the crypto market with their power?
• If you were the head of government, would you accept or reject the crypto opportunity for your country?

It has been thriving before the government intervention earlier and in those days when too much negative news was coming from mainstream media. I do not think the government would suppress or restrain the crypto market. They would try to regulate it and we have already seen certain countries are on the verge of finalizing regulation. Since I am not the head of the government I won't be able to answer the last question as it is not my job to think in that zone. 

[Silberman]

Well I think the governments will want to crack down on it. But we must ask our self if it is possible for them to really do it.

China has trued to ban crypto and some other countries too. But the thing about that is you can not ban or crack down on crypto. 

The only thing they can do it try to regulate it to control it. And they are doing that now since crypto is becoming more popular.

Governments would love to make bitcoin disappear, but they cannot do it, the decentralized nature of bitcoin does not allow them to destroy it the same way they could do so against a centralized opponent, and this creates a difficult choice for governments, if they still ban it and forbid their citizens to hold it, then the wealth that it can be obtained out of this new invention will go to other governments that are more open on their posture to bitcoin, giving them a competitive advantage, so at some point even governments that are against it will have to change their posture and accept bitcoin, even if they are not enthusiastic about the idea.

[cryptoaddictchie]

Well I think the governments will want to crack down on it. But we must ask our self if it is possible for them to really do it.

China has trued to ban crypto and some other countries too. But the thing about that is you can not ban or crack down on crypto. 

The only thing they can do it try to regulate it to control it. And they are doing that now since crypto is becoming more popular.

Maybe for centralized projects they can do that. There are plenty of projects goes down and end up in closure due to Government. But in the case of bitcoin they cant touch it as there are no company or sole person that they can tend to whom to stop it cause Satoshi made this coin anonymously and decentralized which this coin may last forever.

[btc78]

I would like to know your views on the acts of repression of the crypto market:

• Can crypto continue to thrive without the support of governments?
• Do you think governments can suppress and restrain the crypto market with their power?
• If you were the head of government, would you accept or reject the crypto opportunity for your country?

I think yes. Crypto can continue to thrive without direct support from the government. After all, it has reached this far without proper support from many of the governments. Neutrality would be enough to keep crypto afloat but approval and adaptation of crypto by the government will give that extra push for the people.

 governments can restrain crypto, definitely but I am sure a lot of people will still check for other ways to use it. Lastly if I were the head of my government I think I would accept crypto with open arms and I would have to learn about how it could affect the nation

[martinex]

As for the first point, in my opinion, of course it is possible because it depends on the strength of the community's own interest in using investment diversification and feeling like they want more freedom than continuing to be tied to traditional financial patterns and systems, especially since they have felt the difference in the case of use.

The second As for government action in terms of influencing liquidity and crypto adoption, I think they are still capable, but of course there is no complete control.

The last, It seems like we need a leader like El Salvador and I am quite inspired by his performance.

[EarnOnVictor]

I would like to know your views on the acts of repression of the crypto market:

• Can crypto continue to thrive without the support of governments?

You did not clarify this well. "Without the support of the government," did you mean if the government never invested or appreciated it or allowed people to do so? Well, if the first case is the issue, then heck Yes, Bitcoin will flourish with the lack of support from the government. After all, it is people's money that is making Bitcoin to appreciate this much, so the government is not needed here for it to continue to be appreciated and climb in price as we see now.

But if the government does not want Bitcoin in existence, No, Bitcoin may cease to exist. Many would just be running their mouths that Bitcoin is decentralised, private and anonymous in transactions. The latest discoveries have proven that the last two are not true, while the decentralization characteristics of the coin can only be useful with functions websites, apps and hardware wallets. If the government starts clamping down on all the hardware wallets, websites and apps that are dealing with crypto and also people they can trace with the transactions, then this will be a serious problem. The price of the coin will crash and no one would even want to deal with it again to avoid government issues.

• Do you think governments can suppress and restrain the crypto market with their power?

Yes, the government has the power, and Yes again, they can suppress/restrain cryptocurrency if they want. I believe so and I have warned people about it since I joined this forum. We can see the trace of that through the recent regulations, and we've not gotten there already as the regulation of the crypto market is still very light and it's in its initial stage. Expect more over time as the government's concern is to move to lessen the decentralisation of the crypto market. Though it will retain the decentralisation in transactions if the coin/token is structured that way, nonetheless, the government would know more about it to reduce illicit flows.

• If you were the head of government, would you accept or reject the crypto opportunity for your country?

I am a visionary, and just like AI, cryptocurrency is inevitable in the payment and financial industry and the advancement of any country, unless I want to cheat my citizens. So, I will allow cryptocurrency. But I will be thorough and strict with its regulations. I will make sure that tax for the country is not cheated and must know the inflow and outflow of all the registered crypto dealers in my country.

[Dailyscript]

The sad truth is that if the government sees cryptocurrency as a threat to political affairs, limited embezzlement, and economic devaluation, then they will crack down on it. They have the power to do that; the only reason they haven't looked into cryptocurrency for some years now is because most of these government officials and big investors have invested in it secretly or openly. And it has been a source to grow more wealth for them or store there wealth so that it cannot be rubbed or stolen.

[jrrsparkles]

Governments never supported cryptocurrencies no matter what because the reason is obvious if people move to use cryptos instead of fiat then their economy is going down hill,, now they are looking for reasons to blame cryptos to suppress the growth of crypto in their nations because they haven't even imagined that bitcoin would grow this much in very short time period.

There are different types of crypto projects, the two major types are centralized and decentralized and multiple subdivisions in it too but now just talk in the broader perspective, bitcoin is completely decentralized so it doesn't have any single authority where the government can make an order and ask them to seize the operation so if its completely decentralized crypto then the government has no way to stop it completely.

Whereas ether (USDT) is centralized that runs by a single authority so ig the government has a strong reason to make them to do something then they will and anyone who is holding centralized cryptos no matter whether it's in exchange or wallet can be frozen.

[DeathAngel]

Governments can & do crack down on crypto. They may not be able to 100% stop it but they can make things a lot more difficult for people to access. If you are desperate to use it then Tor & or a VPN can be used but if governments in a certain country ban crypto it can cause price volatility but also how can you find on/off fiat ramps. P2P trading can only go so far.

[batang_bitcoin]

Can crypto continue to thrive without the support of governments?

Yes, we have the perfect example through BTC. 

Do you think governments can suppress and restrain the crypto market with their power?

They can for exchanges and their people but they can't cover the entire world to stop with their suppression of stop everything to get involved with crypto.

If you were the head of government, would you accept or reject the crypto opportunity for your country?

I am for crypto so I'd accept it with a grateful heart. 

[Beparanf]

Well I think the governments will want to crack down on it. But we must ask our self if it is possible for them to really do it.

China has trued to ban crypto and some other countries too. But the thing about that is you can not ban or crack down on crypto. 

The only thing they can do it try to regulate it to control it. And they are doing that now since crypto is becoming more popular.

Cutting down the head which is the founder and making a law to make a certain token illegal to use will make any project dead assuming that we are talking about the worldwide government here and not a single government power.

I believe even Bitcoin can be crackdown if the world government decides to abolish Bitcoin since people has no choice than to follow the government if Bitcoin is already forbidden to use. But this is just hypothetical and impossible to happened since world government can’t have a single decision. The only thing they can do is to do it on their own country but there’s already a lot of countries that support crypto so crypto can’t be crack completely.

[deathcode]

putting pressure on the crypto market, yes. but the government will not be able to control ownership of crypto assets such as Bitcoin.
governments pursuing taxes from crypto will contact the growing crypto industry in their countries. it's like an exchange, casino, or maybe mining.
Some regulations can be stressful for business people and crypto project developers. and we have seen how the government intervenes in suppressing the crypto market.

[kentrolla]

The government have absolute power to suppress crypto ad they cannot ban crypto or stop it but they have power to stop people from dealing in cryptos and we can already see the kind of pressure which has been put into crypto exchanges in India and the ugly news coming out of Nigeria. Since we are all aware that government can never be crypto friendly tried discouraging users from indulging in crypto but they failed and now they have adopted the ugly strategy of taxing crypto transactions, extorting and banning exchanges.

[mindrust]

What do you mean by “crack down on crypto”? Do you mean if the governments can ban it? If that’s your question, yes they can do that. Would they be successful? Probably. It is because when they ban it, no legitimate business will be accepting crypto anymore and that means you won’t be using your crypto as a currency. Yes will be able to do p2p trades but there won’t be any exchanges too. That means there will be little to no FIAT volume for your crypto and it will be hard to know the price… Yes the govs can become a major trouble for crypto if they want to.

[aioc]

• Can crypto continue to thrive without the support of governments?

It can and we have seen that happening, we can't stop people from supporting Cryptocurrency even to the point of their government warning, where people think they can benefit they will go for it.

• Do you think governments can suppress and restrain the crypto market with their power?

Yes, it is possible but I doubt if the government will waste its resources and power to suppress Cryptocurrency when in the end it will just yield to their people's will.

• If you were the head of government, would you accept or reject the crypto opportunity for your country?

I will, Cryptocurrency is a new technology that will benefit the various industries in my country so why stop it from being used by my citizens?

[electronicash]

Chinese government has not stopped their people from using crypto despite banning it so there's the example of not being able to put an end to it. 

but governments these days are using the blockchain as some point to monitor users which is not the kind of crackdown you expect and this could result in actually making them more powerful in collecting taxes from the people especially because we are now accustomed to seeing KYC on every platform we signup. and then they supported the ETFs which made people on board so the government is supporting crypto in the end but this is also a double edge sword.

[Abiky]

I would like to know your views on the acts of repression of the crypto market:

• Can crypto continue to thrive without the support of governments?
• Do you think governments can suppress and restrain the crypto market with their power?
• If you were the head of government, would you accept or reject the crypto opportunity for your country?

Governments already have the power to suppress crypto. They can do so by controlling centralized exchanges. It's no secret that most crypto is held by third-parties (private custodians). Only a small fraction of crypto (particularly BTC) is held on self-custodied wallets. So if governments like the US and UK want to destroy the crypto market, they can do so by shutting down CEXs (or prohibit them by doing business with US/UK-based customers). What they can't control is Blockchain networks themselves because of the way they were designed.

If all of the world's countries went against crypto (which is very unlikely to happen anytime soon), it will survive as long as it remains decentralized and censorship-resistant. Of course, market prices will dip. But you can keep using the coin of your choice completely under the radar of the government. It's what's happening with Monero right now where most centralized exchanges are de-listing it. Market prices are low, but the XMR blockchain itself is alive and healthy as usual. Who said crypto was created to please banks and mainstream governments? Wasn't it all about "eliminating" the middleman?