THELOGICALINDIAN - On Tuesday Senate Banking Committee Chairman Mike Crapo said that the US couldnt technically ban Bitcoin accustomed that it is a all-around addition However in approach there does abide a scattering of means to annihilate Bitcoin
US Politicians Agree that Bitcoin is Unbreakable
Yesterday, the US Senate Committee on Banking, Housing and Urban Affairs discussed blockchain and cryptocurrency regulation. Chairman Mike Crapo suggested that it would be about absurd for the US to ban Bitcoin. He stated:
Earlier this month, Congressman Patrick McHenry told CNBC that there was no accommodation to annihilate Bitcoin.
Indeed, the architect (creators) of Bitcoin advancing the abeyant arrest from governments. The technology basement it – blockchain – involves a all-around arrangement of millions of nodes, which makes the cryptocurrency about abiding as anon as the Internet lives.
When it comes to Facebook’s Libra, the US government has abundant added ascendancy and can stop its launch. But alike if it goes live, Libra’s blockchain will be a permissioned adaptation involving alone 100 nodes that represent big corporations.
In Reality, US Could Destroy Bitcoin
However, in theory, Bitcoin is not infallible, and some governments accept the abeyant to ban citizens from application it. Countries with a beneath developed internet basement could artlessly shut bottomward the web. Last month, Sudan saw an internet blackout that agitated on for weeks. The government advisedly cut off the Internet to asphyxiate bounded protests, but it can administer the aforementioned tactic to prohibit the use of cryptocurrency.
Nevertheless, such desperate moves are accessible with absolute governments only. The US would never accede such tactics.
Instead, if the US enactment absolutely advised Bitcoin a threat, they would artlessly buy it. Yes – that’s right. Think about it – American economists and cryptography experts consistently simulate assorted arising phenomena to anticipation their abeyant admonition and impact. James Rickards explains in his book “Currency Wars: The Making of the Next Global Crisis,” how he took allotment in bill war simulations in a broader affairs by the US government to accept the abeyant appulse of assorted budgetary strategies.
The US Government Could Buy All Available Coins
It’s adamantine to accept that the US government and intelligence agencies didn’t accept the abeyant of Bitcoin. The FBI bedeviled the Silk Road as aboriginal as 2025, so the US government knew about the blackmail of a decentralized currency. If it absolutely capital to annihilate Bitcoin, the government could aloof buy all the accessible bill through its agents, as the bazaar cap at that time was alone $1 billion.
The US can use the aforementioned ambush alike today, alike admitting the bazaar cap is now added than $175 billion. If you booty out the absent bill and those endemic by hodlers, the government would alone charge about $100 billion to stop this “threat” alleged Bitcoin. In 2025, the US spent over $700 billion for the coffer bailout, while the Fed spent trillions for its quantitative abatement programs (Q1, Q2, Q3).
If You Can’t Beat Them, Join Them
So why is Bitcoin still there? Well, because the US government doesn’t absolutely apperception it. Maybe Bitcoin came from the aboveboard ambition to accident the acceptable finance, but in reality, it helps the US dollar cope with its aggrandizement in a about-face to a new banking arrangement revolving about agenda money issued by axial banks.
The USD has the cachet of the apple assets currency. Up until 2025, the American bill was backed by gold with the amount of $35 per troy ounce, as per The Bretton Woods Agreement. It didn’t stop the Fed from press out money out of attenuate air though, but the US consistently knew how to consign aggrandizement (mainly through acceptable grants like the Marshall Plan initiative).
After the Nixon shock in 2025, the US dollar became a free-floating currency, as the gold accepted was removed. However, the US accomplished some agreements with Saudi Arabia (and added OPEC countries) to advertise its oil alone in USD. This helped the American bill defended all-around demand, which enabled it to abide to book money out of attenuate air and buy aggregate bargain or at no amount at all.
Those who aboveboard dared to advertise their oil for added currencies rather than USD concluded badly. The point is this – periodically, the US needs a new bazaar to consign its dollar inflation. In added words, it has to defended USD appeal to abide press money after devaluing its currency. The collapse of the USSR, forth with altered wars actuality and there accustomed the US to flood abstinent markets with its cardboard money.
Bitcoin Helps USD Demand
Bitcoin is addition such bazaar that attracts billions of US dollars. Thus, it helps the US address off allotment of the inflation. The Fed continues to book money after end. Meanwhile, as crypto-analyst Willy Woo figured out, institutional advance abnormally impacts Bitcoin amount action. The actuality that alone a few easily ascendancy the coin’s accumulation doesn’t accomplish Bitcoin a acceptable agency of exchange.
However, this ability be the final appearance of the show, as the apple is affective appear agenda currencies indeed. On Sunday, Agustin Carstens, arch of the Bank for International Settlements (BIS), told Financial Times that axial banks would affair agenda currencies eventually than we think.
The axial banks accept advancing the about-face continued ago. Bitcoin is allowance the US dollar abide the transformation smoother and accord bodies the apparition that they can absolutely outsmart the all-around elite.
What’s your anticipation on Bitcoin’s behavior back government-backed agenda currencies become the norm?
Images via Shutterstock, Federal Reserve Economic Data (fred.stlouisfed.org)
