Why is Bitcoin not banned by the US government (Why is Bitcoin not illegal, why not ban it)?

08/17/2023 10:52 • Daily Digest • 83 views

Why is Bitcoin not banned by the US government? Why doesn’t the US government support Bitcoin?

US Congressman Tom Emmer tweeted today that the executive order signed by President Biden includes regulatory recommendations for cryptocurrency. Over the past few weeks, we have seen some information about whether the US government should accept and protect digital assets. However, interestingly, according to recent research, these policies have not been fully considered, which means that the US financial system will not be completely affected or threatened. If Bitcoin is considered a secure investment product, then it may serve as a means of value storage, tax avoidance tool, or “stablecoin”.

But the problem is: as a global blockchain project and payment platform, Bitcoin is not recognized by the federal government as an effective means of value storage. Like other technologies, Bitcoin cannot gain widespread application in the United States because it is inherently a very complex system. In order for users of this system to understand the meaning represented by Bitcoin, three issues need to be addressed:

1. How to ensure secure transactions of Bitcoin;

2. Can anonymity be maintained while ensuring security?

3. Can Bitcoin function and continue to exist like gold?

Why is Bitcoin not illegal, why not ban it

Editor’s note: This article is from BitBond (ID: BitBond007), authored by Detective Block, authorized and reproduced by Odaily Star Daily.

According to foreign media reports, the US Treasury Department has begun investigating and regulating cryptocurrencies. One of the reasons is that the government is studying whether to ban Bitcoin or other digital asset transactions because it does not allow users to use all their funds to purchase Bitcoin and other virtual goods, as some people think; the other reason is that the Bank of England is trying to solve financial crimes related to blockchain, namely “restricting customers from transferring funds to non-custodial wallets” through banks. However, in reality, these rules are only temporary, and they do not want people to use them to store their funds, so it is not necessary to treat them as a legal tool, which would lead to many countries taking enforcement actions and preventing illegal activities. Why doesn’t the US encourage Bitcoin and other cryptocurrencies to be legally used for payments worldwide? First, US law does not specify which entities can buy, sell, send, or receive Bitcoin or any form of digital tokens. Secondly, in the United States, for certain companies, if they want to obtain virtual products and services such as Bitcoin, they must submit an application to the US Securities and Exchange Commission. Thirdly, most federal agencies will not approve cryptocurrency exchanges, such as Coinbase, which may only accept US investors to obtain a certain amount of BTC from it, and cannot guarantee their ownership. Finally, US legislation does not consider whether to allow the processing of digital currencies on private networks. Therefore, the refusal of US authorities to use Bitcoin and other virtual currencies is unreasonable.

Although countries have their own policy positions, to some extent, they still rely on the application of existing regulations. For example, the US government usually requires all exchanges to provide detailed information about the countries in which they operate in order to facilitate the acquisition of this data. However, it is difficult to achieve comprehensive regulatory work if these conditions need to be complied with. In addition, according to the Investment Contract Act, the US government also advises exchanges not to deposit US dollars in individual accounts to ensure their safety. (Image source: Forbes)

However, except for a few exceptions, the legal departments of most countries have not clearly stated whether cryptocurrencies belong to the scope of property under federal law. Nevertheless, there are signs that in the past five years, only about 1% of respondents said they were able to access and operate their cryptocurrencies. In fact, even before October last year, because the market turmoil caused the price of Bitcoin to fall by more than 50%, Canada still had the possibility of continuing to implement strict regulations and even banning all Bitcoin-related businesses from registering. However, what exactly happened is still unclear, after all, there is no large bank in the world that provides cryptocurrency services to its customers, which means they cannot issue such services domestically, nor necessarily sell them directly abroad. Unless it is like this, the cryptocurrency industry may be viewed as a devastating blow.

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