Any country in the world can introduce legislation barring the use of cryptocurrencies as legal tender.
It doesn’t matter that you can still hold it in your private, non-custodial wallet in secret. Your currency may remain “decentralised” — you just can’t do much with it because the government won’t let you.
What happens when cryptocurrency is outlawed?
No legally operating business is going to accept your BTC or ETH if their use is penalised by law. It doesn’t matter how good the technology is, how safe, secure and stable. If it’s outlawed, it’s gone.
And it’s not an issue specific just to autocratic China, and its Communist Party which has long shown its suspicion of crypto.
The US has fired its own salvos too, with the Treasury introducing a proposal to make it mandatory for all crypto transactions exceeding $10,000 in value, to be reported to the Internal Revenue Service (IRS
When filing your taxes in America, you’re already asked whether you have participated in any virtual transactions and are now required to report capital gains accumulated from crypto trading. Yes, holding your prized digital assets comes with a tax bill in the fiat currency you loathe so much.
To make matters worse, it’s your responsibility to track the real market value of every transaction you made and calculate your tax liability, or face legal consequences.
It’s only a matter of time when the rest of the world follows suit (EU is working on its own regulatory framework too)
Of course, everybody acknowledged the impact China’s decision to restrict financial institutions from dealing with digital currencies (and announcement of a crackdown on mining) had, as it was one of the major drivers of the price drop.
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