Hedge fund manager Ray Dalio shared his thoughts about the future of Bitcoin, stating that a crypto ban in the United States has “good probability.”
Dalio outlined how central banks are interested in controlling the supply and demand of their respective country.
They [banks] decided it was in their interest to have a monopoly on banking in a country,” adding that when other types of money, like crypto, create their own supply and demand “things could go bad.”- He said.
Banks Don’t Want Competitors
The crypto market is enjoying a great bull run thanks to the institutional push for cryptocurrencies. Investment firms, managers, and other corporations like Goldman Sachs, VanEck, and Fidelity have filed submissions to the Securities and Exchange Commission to launch a Bitcoin Exchange-Traded Fund (ETF). Naturally, this has led central banks to reconsider the impact of digital assets.
More central banks are adapting to the emergence of new technologies in the fintech space – some even studying the possibility of issuing CBDCs (Central Bank Digital Currency). Although, that’s not the case with other institutions with a more aggressive approach towards digital assets, like India’s central bank.
As an example of strict regulation, Dalio pointed out the current situation in India. As reported by CryptoPotato, the country is moving forward with its plans to ban digital assets — halting crypto holding, trading, and even blocking exchange’s Internet Protocols (IP), according to an anonymous source from the Indian newspaper Business Standard.
India’s Finance Minister Nirmala Sitharaman said there was a “small window of opportunities for Bitcoin,” but it seems that this “small window” means that the government will experiment with Bitcoin while also implementing blockchain technology on companies.
Bitcoin Could be Banned the Same Way as Gold
Dalio added that governments could outlaw crypto-assets the same way they did with gold, referring to the 1934 Gold Reserve Act. This law required all monetary gold to be transferred to the U.S. Treasury, so financial institutions and citizens were not allowed to hold it. The main objective was to “protect the currency system of the United States.”
“Every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing because things can get out of control.
[…] So I think that it would be very likely that you will have it under a certain set of circumstances outlawed the way gold was outlawed. And you’re watching that question arise in India today,” stated Dalio for Yahoo Finance.
On a final note, the hedge fund manager stated that such a ban could be difficult to face if other countries follow India’s steps.
“Now, can they do it? Now we get into the particulars. My understanding from people who are sort of in government surveillance and so on is, yes, it’s a– they can understand, they can track it. They can know who’s dealing with it.”
Published at Thu, 25 Mar 2021 23:04:25 +0000