Bitcoin has become an alternative to traditional currencies, so why should governments worry?

Financial consultants Francesc Rodriguez To and Angela Gallo note that cryptocurrency adoption

admin December 23, 2021

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Bitcoin has become an alternative to traditional currencies, so why should governments worry?

Financial consultants Francesc Rodriguez To and Angela Gallo note that cryptocurrency adoption, particularly bitcoin, is quicker in Africa, geographic area and South Asia than in Western countries, with important challenges and government hurdles.

In a report printed by the French newspaper LE Monde. The two experts said that interest in crypto assets has increased in recent years and accelerated during the pandemic in various countries of the world.

Western countries have seen enthusiasm for these currencies in the pre-pandemic years. But amid high volatility in returns and the frequency of fraud and illegal activities, the concerns of governments have increased in light of the increasing demand for crypto assets.

Wide distribution in Africa, Latin America and Asia

Thanks to the wide use of these coins. Migrant workers can send their money home at a lower cost and in a shorter time than before. This has accelerated the adoption of Bitcoin in African countries such as Nigeria and Kenya. Cryptocurrency investments are expanding in Brazil, which is the largest in South America, led by Vietnam, India, and Pakistan ، Bitcoin trading volume has quadrupled since the start of the Corona epidemic. And many in developing countries have recently discovered the benefits of using virtual currencies for online sales.

There are many reasons behind the demand for cryptocurrencies, such as the instability in the value of national currencies. and capital restrictions, high brokerage costs especially for remittances, and difficulty accessing traditional banking systems. These currencies are expected to become more difficult to access as they will play a role in promoting financial inclusion and innovation. Especially in Africa.

Bitcoin is the illegal currency in El Salvador

Not many governments view the proliferation of cryptocurrencies favorably ، This has caused a lot of activity to shift to India, whose government is also trying to ban cryptocurrencies. But the Supreme Court overturned the decision, forcing the Indian government to reconsider the ban ، Governments justify these measures out of fear of the risks posed by virtual currencies to financial stability, but the main reason – according to the authors – is that governments are trying to issue their own digital currencies through central banks.

China and Nigeria have already started taking this step, and India is preparing to launch a pilot project to launch its own digital currency in the coming months ، This means that the proliferation of private cryptocurrencies will undermine the efforts of governments to launch their own digital currencies, but some other countries, such as El Salvador, have approached the problem from a different perspective.

Bitcoin is now legal in El Salvador, which means businesses must accept payments in the form of cryptocurrency. Among other countries that are enthusiastic and not enthusiastic about the idea, some governments are allowing innovations in cryptocurrency technology, immutable tokens, and blockchain ، While most governments and policy makers tend to restrict bitcoin and other cryptocurrencies; Its prices have continued to rise and more non-tradable tokens have appeared in recent months.