In 1934, the government of the United States confiscated the gold of all its citizens at throw away prices. Shortly after, it set a new official rate for Gold, which was much higher. This was the Gold Reserve Act 1934.
Many today are wondering, if Gold is so physical, scarce and control-resistant, how did the government manage to control it, and can this happen to BTC too?
Why Don’t Central Banks Like Bitcoin?
Bitcoin is a threat to central banks because it is a decentralized currency. This means that it can not be controlled by central banks. The SEC and other financial regulatory authorities have been going hard on Bitcoin citing that the asset is risky and investors are not protected.
According to regulators, the use of and investment in Bitcoin poses risks such as total loss of investment due to cybersecurity hacks and high price volatility. The recent FTX collapse that has implicated over 50 other companies served as a great example for the SEC’s cause.
Despite the warning, however, many people and nations continue to adopt Bitcoin. Robert Kiyosaki added more BTC to his portfolio and he is certain Bitcoin is not going anywhere soon. Other companies like MicroStrategy and countries such as El Salvador have also continued to add Bitcoin. The central bank views Bitcoin as a Fiat currency destroyer that must be stopped at all costs.
Just like Gold, the central banks (A.K.A the government) were losing grip on the asset. Holding physical Gold not issued by the government was giving people too much freedom, and the government couldn’t have that.
Can Central Banks Curb BTC Adoption?
Well, Central Banks have indeed tried to control Bitcoin through their regulatory arm, the SEC. However, due to its decentralized nature, Bitcoin has proven to be unstoppable. It is a digital currency that anyone can use and is not limited to international boundaries.
Due to this, even if the SEC has restrictions and reservations about it, it only applies to their area of jurisdiction, the United States of America, and not in any other country.
Hence, whether Bitcoin is accepted in the U.S or not does not affect its global adoption in other nations. The only way the Central Banks are going to curb Bitcoin adoption is if they have the power to shut down the internet globally – highly unlikely.
Fun Fact: The U.S.A alone has over 30,000 Bitcoin ATMs!
Conclusion
Although central banks have the power to regulate all currencies, they don’t have the necessary jurisdiction to regulate Bitcoin and crypto. The SEC requires Bitcoin and crypto to be securities in order for their regulations to work. Despite the Central banks futile attempts to crash and invalidate Bitcoin, the asset continues to thrive in both price and adoption.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.
