As Bitcoin and other cryptocurrencies continue to rise in both value and popularity, national governments are starting to scrutinize them more. Case in point is that the Trump administration may be considering regulating Bitcoin.
The last year has been an exciting one for cryptocurrency, especially Bitcoin. The digital currency has skyrocketed in value, with no telling how high it will go. The success of Bitcoin has finally convinced major financial institutions to come on board, but such success also brings a great deal of scrutiny. In a recent press conference, White House Press Secretary Sarah Huckabee Sanders said that the Trump administration is monitoring Bitcoin and may consider regulating it.
Feds Watching Bitcoin
During the daily press briefing in the White House, Press Secretary Sarah Huckabee Sanders was asked by a reporter about President Trump’s views on Bitcoin. In her reply, she said:
I know this is something that is being monitored by our team here. In terms of specific briefings and announcements on it, I don’t have anything that I can share with you right now but would be happy to follow back up with you.
Sanders was then asked about this Bitcoin monitoring, to which she said:
I know this is something that is being monitored by our team here. In terms of specific briefings and announcements on it, I don’t have anything that I can share with you right now but would be happy to follow back up with you.
Is Regulation for Bitcoin Coming?
The fact that the US government is keeping tabs on Bitcoin should not come as a surprise. The IRS just won its lawsuit against Coinbase, causing them to hand over data on more than 14,000 accounts. The IRS suspected many people were evading taxes by using cryptocurrency, and an initial survey found that only 0.2% of Coinbase users reported a loss or gain on their transactions. The silver lining in this case is that the accounts handed over are restricted to those with a Bitcoin equivalent of $20,000 or more in a given year between 2013 and 2015.
There are a number of other reasons why the Trump administration will wish to monitor Bitcoin and other cryptocurrencies. The fact that a growing number of people are willing to use a monetary system outside of federal control is not something that most centralized governments, either politically right or left, will be thrilled with. Then there’s the worry about what impact, if any, cryptocurrency could have upon the economy, not to mention the normal hand-wringing about Bitcoin being used for illegal purposes.
Right now, the federal government is only monitoring Bitcoin, but most users would be very unhappy with any regulation. One of the reasons why Bitcoin has grown so much is due to its unregulated nature, and many view future regulation as hurting the digital currency. The president of Global Blockchain Technologies Corp., Shidan Gouran, states:
We believe that the greatest threat is regulation. Several governments across the world have clamped down on exchanges, some halting trading altogether. Others have gone on to outright ban the use of Bitcoin. Sudden government actions in major Bitcoin trading hubs stand to disrupt the market, with the potential to severely affect the utility of bitcoin – and accordingly, the value.
Right now, we’ll have to wait and see if the Trump administration does anything more than just monitor Bitcoin and its cryptocurrency brethren.
Do you think that the Trump administration will eventually regulate Bitcoin? If so, will this hurt the value of the cryptocurrency? Let us know in the comments below.
Images courtesy of Wikimedia Commons and Bitcoinist archives.