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Bitcoin, cryptocurrencies, and blockchain have recently been gaining mainstream attention globally. Although there needs to be more attention from long term users and investors, it has already attracted the attention of governments worldwide. Several countries have been observed outrighting bans or planning an outright ban on cryptocurrencies, especially Bitcoin. This can largely be attributed to a general lack of clarity regarding cryptocurrencies which leads to difficulties in getting proper regulations, which usually leads to governments banning them.
Following the current scenario of how cryptocurrencies are being treated globally, Abhiruk Bhattacharyya, the Community Manager of The Coin Republic, had an exclusive interview with Larry Sharpe, an entrepreneur, and a political activist. The extract below highlights their discussion on understanding why and how the governments globally are trying to regulate or ban cryptocurrencies.
Abhiruk: Plenty of countries around the world are quite suspicious of cryptocurrencies, Bitcoin especially. In fact, a couple of them have banned cryptocurrencies. Do you think there is any logical reason behind it, or do you think there is a political motive attached to it?
Sharpe: Prohibition never works ever, banning something never makes it go away ever, but actually intensifies the problem. So, I don’t know why governments keep doing it. But I think the reason is because if they ban it, they will slow it down, and that’s often true. You look at anything from cryptocurrency in Nigeria to Cannabis in New York state, it doesn’t matter. The government knows it’s coming, but they have to make sure that there is a system, so they are able to control it. And the more they are not ready for it, the more they ban it. And they are not banning it so that it will never come back. It’s actually smart, they ban it, now they will actually figure out about what Bitcoin is and how well they can regulate it. And as they figure out what it is, they start to figure out how to control it and make sure their enemies don’t get it, and so on. So, they can create laws, and rules and regulations, so they can get the biggest chunk of it. And that’s the issue, the issue not that cryptocurrency or Bitcoin is going away.
The Government ends up creating a maze of rules and regulations where only the people who are super savvy or super-wealthy can possibly get around it, and everybody else will be by default a criminal. This lets the government control the distribution of wealth generated by it.
Abhiruk: Let’s talk about the controversial Diem project. I believe you must be aware of it, it was formerly known as the Libra project and ended up being quite a media sensation in the recent past. What are your thoughts regarding it? As many world governments have deemed it as a threat to their national interests, do you agree with their narrative?
Sharpe: Yes and no. It’s very similar to the points you get for flying in a specific airline. I believe some of them call it “loyalty points or air miles”. That is their own form of money, you can buy flights with that. So, if I fly, I will get points, and with the points, we can buy flights. So people and organisations create their own money constantly, but it’s all in the local area usually.
The point here is how does the government get its cut, that’s the biggest issue. The issue is nearly always the revenue issue. Remember, the biggest way governments control us is in two ways. One, your money, where it’s going, and what tax you didn’t pay. And two, lying on a government form. Lying can get you in jail more than anything else.
The Government always wishes to know how money is distributed in the economy. You go outside their known rules and that’s when they get concerned.
Now specifically about the Diem project which is indirectly Facebook’s money, it’s a problem, as Facebook is an international monopoly. Even Google is an international monopoly, The largest search engine in the world is Google, and the second largest search engine is Youtube, owned by Google. And when we have that, what if Google makes its own money. As when it does, what’s going to happen, and that’s where Facebook is scary. Because next is Google, what happens when Netflix and Amazon Prime create their own money. And now we have a problem, and the government will be concerned about how they are going to control this.
Following how governments are concerned regarding how they regulate cryptocurrency, we can say that the governments are imposing bans to understand the technology. Banning crypto for example, would yield time for the governments to understand how to control crypto assets and create tax policies regarding their distribution. However, while taxation is necessary, the governments seem to be missing out on the potential that blockchain and cryptocurrencies have to offer in the near future ahead.
To learn more about Larry Sharpe, check out his podcast, The Sharpe Way on weekday nights around 7pm Eastern Time.
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