Wednesday, December 8

Bitcoin doesn’t need state, state needs Bitcoin

As both Bitcoin development and maintenance are decentralized, governments cannot stop it. On the other hand, countries are adopting and legalizing Bitcoin because they need it.

As central bank digital currencies (CBDCs) have become a staple in many countries, creating a Salvadoran currency, even with controlled printing, would not be as good a choice as Bitcoin. After all, the government has no spending on development and security, in addition to being a currency free from international sanctions.

Likewise, cities are also looking to attract enterprises to tax them. As with banks that after years of battling Bitcoin, they now understand that the only way to win this fight is to adopt it.

Bitcoin is better than its own currency

In the case of El Salvador, for example, the country does not even have its own currency, being dependent on US decisions that do not care about the impact caused in this country.

The Salvadoran government would have few choices, stick with the dollar, adopt a controlled printing currency (BTC), or create its own.

Note that the last option is bad for the country when compared to Bitcoin. Even if the state did not print its currency at will, as they do with the dollar, few would buy it, after all, its economy is weak and state currencies are transitory, that is, they are usually replaced by others.

As Bitcoin is already present around the world, it is easier to use it for international remittances than other currencies. It also already has an entire infrastructure of applications and services ready and under constant development, without the government having to spend on it. Enabling your citizens to access the financial world instantly if they have a cell phone.

Another point is that countries that use Bitcoin do not suffer from political sanctions precisely because they are not from any country. It is a global currency.

It is also important to note that in the case of El Salvador, the Bitcoin Law is attracting tourists. Just as its reserves in BTC are generating profits, allowing the government to use them for infrastructure improvements, for example, the Salvadoran government will build 20 new schools thanks to this.

Countries need to tax Bitcoin

Another point is how much these countries can gain or not lose with the entire industry surrounding Bitcoin. Even China, which banned Bitcoin this year, is considering changing its laws again.

Other examples are the newly elected mayors of US cities, at least four of them want to receive their salary in Bitcoin. Your ultimate goal, of course, is to bring businesses into your cities and then earn revenue through taxes.

Banning it, as China did, is the worst possible action as the country fails to profit even from people using the currency, as it is unstoppable. Others migrate to friendlier countries like the US.

Not just countries, the entire industry

Other industry players, such as banks and even exchanges, also need Bitcoin more than Bitcoin needs them. This is happening with or without them.

While these services may introduce more people and institutions to Bitcoin, accelerating its adoption and rising price, their goal is the same as that of governments: to gain a share from the fees. Given this year’s events, they are the ones who are chasing it, not the other way around.

Finally, even Brazil is proposing laws to allow wages to be paid in BTC. With the Real being one of the currencies with the greatest devaluation in recent years and bitcoin appreciating and being bought in billions of reais by Brazilians, it is no wonder that the government is looking for ways to profit from it.