Is Imposing a Ban on Crypto Even Possible
- Crypto can’t be banned
- Effects of Banning Crypto
- Collateral Damage
One of the biggest questions that every investor is asking these days is whether governments can ban crypto. And if they do impose a ban, will it have any effect on the ability of cryptocurrency to continue doing what it is doing at present.
Crypto can’t be banned
Many experts believe that cryptocurrencies are nothing more than computer codes, which can’t be banned. Transferring crypto from one wallet to another is like sharing data, meaning any regulatory ban on crypto will not take the ability of people to exchange cryptos.
Theoretically speaking, people may call crypto an asset, currency, commodity, and security. It is also true that fundamentally cryptocurrencies do have value and liquidity. There are thousands of people around the world who wish to own cryptocurrency.
Governments could still create barriers for investors to trade in crypto. Most people use exchanges to trade in crypto as they are unaware or don’t understand the technical aspect of creating crypto wallets. Governments could ban these trading platforms, making it difficult for people to invest in cryptocurrency.
Effects of Banning Crypto
If exchanges are banned by governments and people are not able to trade in crypto, they will look for alternative methods to do so. This will only give rise to the black market trading of cryptocurrency.
Black market trading simply means that a person will need to find someone, willing to exchange cryptocurrency for fiat currency.
Cryptocurrency is not just being used as a medium of exchange, but it has also led to many other innovations in the world. The blockchain system of cryptocurrencies, especially Bitcoin and Ethereum blockchain, is used to create many financial products. If a ban is imposed on cryptocurrency, the utilization and creation of public-blockchain products will also become illegal. Meaning, if Bitcoin becomes illegal then the fundamental blockchain behind Bitcoin, also becomes illegal.
This will prove to be very damaging for the innovation of the blockchain industry. In such instances, blockchain platforms will be required to be developed from the beginning, costing a lot of time and money. It is also hard to tell if after spending so much time and money, the industry will be able to develop innovations that offer better solutions than what already exists.
Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investing.
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