Why do Government Need Bitcoin?

[Stalker22]

I believe its still based on profits and incentives, nothing more. Just like any regular bitcoin investor. But the question is, if they have a strong urge to accumulate bitcoin, why do they keep attacking bitcoin instead of welcoming it? Just because bitcoin is decentralized and they can't gain the full control on it?

I am sensing that the government until now is still hesitant about bitcoin. That is why instead of encouraging the people to start studying bitcoin, they end up doing the opposite thing, and scare the people that bitcoin isn't reliable and stable enough, and that may only end up as a get-rich-quick scheme.

Who is the "government" really?  They are the people who print the money and basically run the whole traditional money system.

Why would those people ever encourage you to use an independent, decentralized money system like Bitcoin that they cannot control? They wouldnt.

Its not that they are just hesitant about Bitcoin; they see it as a serious threat.

Their main job is keeping the fiat currency (like the dollar or euro) strong and the banking system they control.  So, naturally, they use every available tactic - making up new rules, or spreading fear and doubt - to scare the public away from crypto.  They need you to think Bitcoin is too risky or just a silly "get-rich-quick scheme".  Because if everyone started to trust and use a currency the government cant manipulate with or confiscate, the government loses a big chunk of its power over people.

[Iamgoat]

Governments don't need Bitcoin. They just want to ensure there's nothing left they can't control. If they hold a significant amount of coins, they can control this market, manipulate it if necessary and regulate prices as they see fit.

Just as they have control over other financial instruments, they don't want to stay away from cryptocurrencies either. At least that's how the governments of developed countries see it. They've wised up now, realizing they can't defeat Bitcoin, they want to control it as much as possible.

The government does not truly need bitcoin to survive but they hate anything they cannot control and this is why for years they have tried their possible best to to ban it by calling it a scam and so many other names but all efforts went in futility and bitcoin just keep growing. Now they see they can't kill it anymore because of how rapid it has grown over the world so what the smart ones are doing right now is to keep changing their plans to instead of fighting the bitcoin, they will rather want to join and control it.

[Mandoy]

Governments don't need Bitcoin. They just want to ensure there's nothing left they can't control. If they hold a significant amount of coins, they can control this market, manipulate it if necessary and regulate prices as they see fit.

Just as they have control over other financial instruments, they don't want to stay away from cryptocurrencies either. At least that's how the governments of developed countries see it. They've wised up now, realizing they can't defeat Bitcoin, they want to control it as much as possible.

The government does not truly need bitcoin to survive but they hate anything they cannot control and this is why for years they have tried their possible best to to ban it by calling it a scam and so many other names but all efforts went in futility and bitcoin just keep growing. Now they see they can't kill it anymore because of how rapid it has grown over the world so what the smart ones are doing right now is to keep changing their plans to instead of fighting the bitcoin, they will rather want to join and control it.

I agree that governments do not require Bitcoin as it is, but the fact that they have shown greater interest is a pointer that they can no longer afford it. The initial efforts to define Bitcoin as a scam or even prohibit it have failed since the network continued to expand, despite regulatory actions. This has caused the strategy now to move towards regulation, taxation and participation limitation by governments that it feels is the most effective way to hold the opponent outright. Owning or introducing Bitcoin or similar to the financial systems does not imply that they own the network itself, but have control at the periphery. It is a bigger trend: when one can not destroy something, institutions attempt to adjust to it and co-exist. The decentralization technology of Bitcoin guarantees inaccessibility of complete control.

[DanWalker]

Since Bitcoin is a decentralized currency and it can be transacted internationally without any hassle and since it is completely blockchain technology, there is a permanent record of all transactions which no one has the power to delete. For this reason, if the governments of all countries in the world start using Bitcoin, the process of transactions from various imports and exports will be easier. And for those who do import and export business, payment transactions will become easier. So not only the government but the whole world needs Bitcoin and the international sector. But so far the whole world is not fully ready for it.

If they really need bitcoin and it helps them as you say, why isn't the world ready to embrace it yet? What are the barriers?

Why do most international trade transactions today still use centralized systems like SWIFT and TARGET2? Even Russia and China, countries unwilling to use American and European systems, are trying to build their own systems without Bitcoin. 

I think the world doesn't really need Bitcoin as much as we think, not everyone sees its potential and needs it as much as we do.

[Oasisman]

Governments don't need Bitcoin. They just want to ensure there's nothing left they can't control. If they hold a significant amount of coins, they can control this market, manipulate it if necessary and regulate prices as they see fit.

Just as they have control over other financial instruments, they don't want to stay away from cryptocurrencies either. At least that's how the governments of developed countries see it. They've wised up now, realizing they can't defeat Bitcoin, they want to control it as much as possible.

The government does not truly need bitcoin to survive but they hate anything they cannot control and this is why for years they have tried their possible best to to ban it by calling it a scam and so many other names but all efforts went in futility and bitcoin just keep growing. Now they see they can't kill it anymore because of how rapid it has grown over the world so what the smart ones are doing right now is to keep changing their plans to instead of fighting the bitcoin, they will rather want to join and control it.

That was their first reaction when the government found out that a significant number of people had started using Bitcoin. They cannot control it, so they don't recognize it and tell people to stay away from it. However, things did not go the way they want it for Bitcoin, to end it. Now, they are regulating it, trying to put control over it, but they still can't, so they are now going to impose taxes on any crypto transactions. That's what's happening here in our place. The government is too busy imposing taxes because its greedy minds are actively working now.
I will be expecting it to get even worse in the coming years.

[Fuso.hp]

Just as we all want to make a profit after investing, the government of a country will also think the same way. That is, the main purpose of everything is to take the economic condition of their country to a better level. The government may decide to accept Bitcoin for some other reasons, such as many times it is seen that the value of fiat in a particular country decreases and on the contrary the price of the dollar increases, which makes the economic condition of the country worse, so when the government of a country keeps Bitcoin in their reserves and when the price of Bitcoin increases relatively a lot at the end of a certain period, then the economic condition of that country will improve. There are still many such government systems in countries that have Bitcoin in their country's reserves and they will also buy Bitcoin in the future, but they keep this matter secret from the world because the government system of any country will not want to bring all these secrets to the fore.

[malekbaba]

Actually government  dislike btc or doesn’t  really like in the way individuals like it. but they respect and tolerate it when it becomes too big to ignore. Many see BTC as a threat to monetary control, tax enforcement, and capital flow rules. At the same time, they recognize its usefulness as digital gold, a reserve hedge, and a neutral settlement asset. So the attitude is mixed: cautious, strategic, sometimes hostile, sometimes embracing. They don’t want it replacing fiat, but they don’t want to miss it either.
 may need Bitcoin mainly as a strategic and financial tool. Bitcoin offers a hedge against inflation and currency devaluation, especially when global trust in fiat money weakens. It allows faster, borderless value transfer without relying on another country’s banking system, which matters during sanctions or trade restrictions. BTC can also act like digital gold for reserves, with a fixed supply that no one can print. Some governments also see it as a way to attract investment, innovation, and strengthen their position in the future digital economy.

[Publictalk792]

Just as we all want to make a profit after investing, the government of a country will also think the same way. That is, the main purpose of everything is to take the economic condition of their country to a better level. The government may decide to accept Bitcoin for some other reasons, such as many times it is seen that the value of fiat in a particular country decreases and on the contrary the price of the dollar increases, which makes the economic condition of the country worse, so when the government of a country keeps Bitcoin in their reserves and when the price of Bitcoin increases relatively a lot at the end of a certain period, then the economic condition of that country will improve. There are still many such government systems in countries that have Bitcoin in their country's reserves and they will also buy Bitcoin in the future, but they keep this matter secret from the world because the government system of any country will not want to bring all these secrets to the fore.

Yes government may have Bitcoin in the belief that its main goal, such as that of an investor, is economic improvement of nation, especially when local currency is losing value and dollar is rising. Country that holds Bitcoin in their national reserves will have form of protection against fall of their own currency since when price of Bitcoin increases it will have direct effect on economy of country. You also mention that much of nations probably keep or buy Bitcoin in secret to stop political issues or to show their financial plan to rest of the world, which means that Bitcoin is becoming major national reserve currency because of simple need to make money and keep going.

[G_Besar]

The government does not truly need bitcoin to survive but they hate anything they cannot control and this is why for years they have tried their possible best to to ban it by calling it a scam and so many other names but all efforts went in futility and bitcoin just keep growing. Now they see they can't kill it anymore because of how rapid it has grown over the world so what the smart ones are doing right now is to keep changing their plans to instead of fighting the bitcoin, they will rather want to join and control it.

Even though the smart people you're referring to have changed their plans to join Bitcoin, they still won't be able to fully control Bitcoin, even if they invest more capital to do so. Most governments will care more about things they can fully control in order to quickly reap the profits they desire, but in the case of Bitcoin, they must understand that this is different from other things they can already control. Because Bitcoin doesn't need any government to grow and develop as rapidly as it has, and its adoption has become widespread worldwide.

[centrum]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?
Yes I'm genuinely curious. I'm not talking about generic answers like making a strategic reserve or the likes
Something that would make them neglect the fact that Bitcoin is decentralized and doesn't need a Central Authority.

many people ask why the governmant is paying attention to bitcoin. to me the matter seems very simple. the governmant does not actually want bitcoin. but they also cannot ignore it because bitcoin is a system that does not give or take permission from anyone. there is no central authority. there are no bordars. it works without banks. this is the most uncomfortable part for governmants. still they take it seriously because today they are in control and tomorrow they may not be. today they impose sanctions and tomorrow they themselves may fall under sanctions. then the entire banking and fiat system may stop working. bitcoin is not an alternative currency here. it is a financial network that exists outside of control. the government understands this. so they do not want to take it over but rather want to be inside it. bitcoin does not need the government. the reality is that the government cannot ignore bitcoin.

[JayJuanGee]

There is something deep about the question of OP, and there is something wrong about the question at the same time...

It seems to me that the members who started out answering the question in the negative (saying that governments do not need bitcoin), then they are placed in a pickle, which causes me to speculate that guys who answer the question in the negative probably do not really understand bitcoin and the inability of governments to just ignore bitcoin or to act like bitcoin does not exist, since it is not like governments have a choice about bitcoin, and they cannot just keep operating like bitcoin does not exist and completely ignore bitcoin, either.

So in some sense, governments need bitcoin (or need to get involved in bitcoin) or else they risk leaving bitcoin up to the people in an unorganized way (and maybe it would be best for bitcoin if governments did not get involved, perhaps? but there can be a lot of scams too that end up coming out of bitcoin and inspired by the monetary aspect of bitcoin). 

It does not seem prudent for governments to just ignore bitcoin and just allow it to potentially grow completely out of their attempts to guide, control or get involved in it - not that governments can completely control bitcoin right now, even though surely, as many members have already pointed out, in recent times, various governments have been getting more and more involved in bitcoin in various ways whether they want to be involved or not.  Even Trump's seeming embrace of bitcoin had likely contributed bitcoin having to be discussed and/or considered whether in the USA or in other jurisdictions, including that the US President has influence upon the world-wide reserve currency (referring to the dollar), so in some sense, in recent times (whether due to Trump or otherwise) many governments have been increasingly coming to conclusions that they have to get involved in bitcoin in one way or another, even if their involvement might be to just clarify their stance on the bitcoin matter.

For sure, many of us likely recognize and appreciate that there are all kinds of governments and all kinds of jurisdictions, and maybe this thread is referring to national governments, even though within each nation there will be various local governments that have differing levels of power and/or authority that may in part depend upon how their National government is structured, and maybe some of the national governments will preempt their local governments from taking any kind of stance that might contradict anything that the national government might say on the topic of bitcoin and/or on the topic of money (if bitcoin might be considered a money or is it merely an asset? or a commodity?).

Of course, governments are made up of individual decisions and even customs, traditions and laws and various kinds of involvements of institutions to also influence government behaviors and stances on a topics, such as bitcoin. 

There surely have been various kind of stances that governments have been taking in respect to bitcoin over the past 17-ish years, and maybe some governments might have ONLY recently started to consider the bitcoin matter, and over the years, some of them have had to change their stances various times based on their learning about bitcoin and then also perhaps based on their being influenced by how other governments (jurisdictions) are treating the topic.

Whether governments need bitcoin or not, it seems that bitcoin is of such a category that there is going to have to be some ongoing involvement in the consideration of bitcoin, and surely ongoing attempts to influence it, control it, or put bitcoin into known legal categories, and surely sometimes the actions of governments will negatively (and perhaps positively sometimes) affect individuals (or institutions or other governments) who are involved in bitcoin.

On some level, there has been and likely will continue to be ongoing battles related to bitcoin, since bitcoin does not exactly fit within some of the traditional categories of assets or value systems, and so yeah, there can be some difficulties in trying to control aspects of bitcoin which might relate to declarations or even various actions against individuals (or institutions or other governments), and surely attempts to control bitcoin on and off ramps or to sway abilities of individuals to directly transact with other individuals with their bitcoin.  Surely we have likely already seen governmental overreach come into play, and I cannot see them stopping in their from time to time overreach behaviors, whether it is divide and conquer (on purpose) or merely incidental with them believing to be carrying out oversight duties (or proclamations of protecting the people protecting the children)

Of course, also there can be potential vulnerable points (of attack) with node runners, miners, hardware providers (including wallets) and software developers.

There can be many ways that governments can try to control bitcoin or to control aspects of bitcoin, and even control people (and capital) in their abilities to move from one jurisdiction to another. 

We also cannot always believe what governmental officials say since sometimes they lie or they mislead or they say what they think is more acceptable (rather than the truth), and I am not even anti-government, yet the fact of the matter is that sometimes government officials speak out of both sides of their mouth even though in theory they are supposed to be publicly accountable.

We can have transparent aspects of government that exists alongside dark (or covert) sides of government, so sometimes proclamations that government agencies, policies and/or practices are acting in the public interest are not necessarily going to result in just (or fair) outcomes...and I am not going to proclaim to know how to resolve these kinds of matters, since governments can have various justifications for getting involved with certain aspects of bitcoin whether they are trying to be bitcoin friendly or to fight against bitcoin or to co-opt it or some other agenda that they may or may not disclose.

I will still suggest that the question of governments needing bitcoin seems to be somehow out of place, since bitcoin cannot be uninvented, even though surely some governments could attempt to play hardball with bitcoin, which may well end up pushing bitcoin more underground, which might not be in the interest of governments to battle bitcoin as an underground phenomena... even a potentially wide-spread underground phenomena in which not all nation-states are likely to take the same side in such battle of favoring or disfavoring bitcoin, if such battle were to occur.

So in regards to what they say or what they do or the kinds of policies and/or practices that might come about, we are going to have various governments speaking out of both sides of their mouths, whether they purport to be in favor of bitcoin or not, many times, they might be in favor of only a certain kinds of bitcoin (or certain visions of what they believe bitcoin is or should be), even though they may well prefer to try to un-invent bitcoin (or un-discover it) which does not seem very practical, even if some governments might try to pursue various kinds of draconian paths in regards to bitcoin... or maybe smile on the outside while dividing and conquering certain bitcoin players, and/or arresting/jailing certain kinds of bitcoin persons (such what seems to be taking place with the Samurai developers).  Surely Ross Ulbricht's situation was an injustice, even though he was released from jail around 12 years after getting put there.

[impulse709]

Actually government  dislike btc or doesn’t  really like in the way individuals like it. but they respect and tolerate it when it becomes too big to ignore. Many see BTC as a threat to monetary control, tax enforcement, and capital flow rules. At the same time, they recognize its usefulness as digital gold, a reserve hedge, and a neutral settlement asset. So the attitude is mixed: cautious, strategic, sometimes hostile, sometimes embracing. They don’t want it replacing fiat, but they don’t want to miss it either.
 may need Bitcoin mainly as a strategic and financial tool. Bitcoin offers a hedge against inflation and currency devaluation, especially when global trust in fiat money weakens. It allows faster, borderless value transfer without relying on another country’s banking system, which matters during sanctions or trade restrictions. BTC can also act like digital gold for reserves, with a fixed supply that no one can print. Some governments also see it as a way to attract investment, innovation, and strengthen their position in the future digital economy.

Governments are not usually unable to get behind Bitcoin as much as regular people do- they are afraid that Bitcoin may hamper their monetary policy, taxation, and capital movements. However, with the increase in BTC, it is no longer insignificant. It can be of advantage to the governments on a strategic level: as a protection against inflation, a digitalized gold-like reserve, and a rapid, borderless tool of settlement. Bitcoin has offered an alternative to evading the traditional banking in cases such as sanctions or trade restrictions. Besides, its encouragement or regulation may bring in investment and innovation. It is a delicate juggling act, then, it is tentative, even aggressive, but it is also aware of the strategic benefits of possessing Bitcoin.

[MarjorieZimmermanGinger]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?
Yes I'm genuinely curious. I'm not talking about generic answers like making a strategic reserve or the likes
Something that would make them neglect the fact that Bitcoin is decentralized and doesn't need a Central Authority.

Regardless of which perspective we look at it, I see the benefits: governments can see Bitcoin growing at a much higher value in the future compared to the performance of fiat currencies, which they believe are an important financial structure within a country. Diversification of asset reserves is likely why Bitcoin is a good choice to hold, and in some cases, we can see how El Salvador itself has shown such a significant change in direction after fully adopting Bitcoin. Holding Bitcoin could potentially help a country survive inflation, allowing for a post-recovery period, given Bitcoin's robustness and ability to maintain its value over time.

[Furball808]

Fiat is losing trust from its people. Even the USD is not guaranteed to be always in power. Neither will the next fiat to dominate. No currency will always be on top but bitcoin exists outside of this whole fiasco which makes it more reliable for countries. Knowing that they will be fine as long as they have bitcoin no matter what happens with fiat.

[fuguebtc]

Regardless of which perspective we look at it, I see the benefits: governments can see Bitcoin growing at a much higher value in the future compared to the performance of fiat currencies, which they believe are an important financial structure within a country. Diversification of asset reserves is likely why Bitcoin is a good choice to hold, and in some cases, we can see how El Salvador itself has shown such a significant change in direction after fully adopting Bitcoin. Holding Bitcoin could potentially help a country survive inflation, allowing for a post-recovery period, given Bitcoin's robustness and ability to maintain its value over time.

But the problem is you're viewing bitcoin from a personal perspective, not a government perspective. The benefits of bitcoin that you are referring to are what investors like us receive from bitcoin, not what the government will receive.

What positive changes has El Salvador achieved since adopting bitcoin into its economy? Because, as far as I know, after four years of adopting Bitcoin as legal tender. They announced the repeal of that regulation in early 2025, and their economy is on the verge of default and needs help from the IMF.

Inflation and a country's economic development depend on many factors, such as monetary policy, foreign policy, and political stability...Bitcoin can't be of much help in this case. El Salvador is a clear example showing that Bitcoin cannot impact or improve a country's economy.

[jokers001]

Fiat is losing trust from its people. Even the USD is not guaranteed to be always in power. Neither will the next fiat to dominate. No currency will always be on top but bitcoin exists outside of this whole fiasco which makes it more reliable for countries. Knowing that they will be fine as long as they have bitcoin no matter what happens with fiat.

Of course, fiat is losing trust from the public because it is printable, it is perishable and its value decreases due to inflation which causes us to suffer economically in our daily lives, so it seems that this currency will not be able to dominate now because people are creating a lot of knowledge about Bitcoin and governments with the right knowledge about BTC are considering Bitcoin as an economic revolution.

However, even if fiat is eroding, Bitcoin is not and it is traded or acts as an option against economic recession or inflation and it acts as a hedge.In my opinion, I understand that smart governments are now embracing Bitcoin, rather than creating a blind spot towards conventional currencies, i.e. reducing their reliance on fiat.

[YOSHIE]

Why do Government Need Bitcoin?

The government doesn't want to do something if it doesn't benefit them, we can see that Bitcoin can be used as a hedge against fluctuations in inflation and foreign exchange reserves besides that with encouragement Technological innovation in various digital currency service sectors has made the government enthusiastic about adopting Bitcoin.

Another reason encourages the government to continue to prioritize Bitcoin as the main means, with Bitcoin being legal in the country, it can create new tax revenues from crypto assets, in general Bitcoin can attract foreign investors and is a the best strategy for overall economic stability, with today's technology and times, if the government doesn't do anything about Bitcoin they will become obsolete, for that reason the government really needs Bitcoin.

[justinlamode]

Someone said something on Altcointalk and it got me thinking why do government need Bitcoin?
Yes I'm genuinely curious. I'm not talking about generic answers like making a strategic reserve or the likes
Something that would make them neglect the fact that Bitcoin is decentralized and doesn't need a Central Authority.

Government does not need Bitcoin because it is going to do anything serious for them, they need Bitcoin because it could be a measure of economic power if not new but in the future. We are in a time where technology is sweeping through the world and Bitcoin aligns perfectly with this technological age,  so chances are high that Bitcoin may become a measure of economic power in the future, just like gold which is why no government wants to be left behind.

Attempts have been made to create digital currencies to weaken Bitcoin but none of them seems to have succeeded, so they have no choice than to embrace Bitcoin.

[Woodie]

Is it possible that governments wants a piece of Bitcoin to control or manipulate other assets or stocks?? Stay with me here, you know how Bitcoin responds to all these political rantings or government regulations and price always signals the sentiments of what other investors think of the new developments... What if the government could use Bitcoin to misdirect an agenda to paint a picture that investors are in support of something... What if the government wants to use Bitcoin to control the stock markets indirectly because today these assets are behaving like linked asset's...

[As-Soon-As]

The government of the country does not like Bitcoin at the beginning, and the people of his country who like Bitcoin hate the reason for their choice. But later when the popularity of Bitcoin increases in his country and the demand of the people and Bitcoin is widespread, the government of the country respects Bitcoin. And later they start liking this Bitcoin and to protect the inflation of the country, they accept this Bitcoin as a holding.
Because Bitcoin is a digital currency, due to its wide demand in the current world, they are ready to grasp this Bitcoin more and they give the most importance to this Bitcoin as a holding to get the financial independence of the country in the future. Because Bitcoin plays the best role in eliminating the economic shortage of the country and in eliminating the economic shortage of the individuals who hold Bitcoin.