Challenges ahead for cryptocurrencies – Numismatic News
Cryptocurrency is touted as the way of the future, while physical coins and banknotes are demonized as the way of the past. Bitcoin and other cryptocurrencies have risen in value to become crypto-values beyond comprehension. They are also notorious for collapsing along with stock market falls.
There are advantages to cryptocurrencies when considered against the use of cash. These forms of electronic value can be transferred without any intermediary, be it a bank or broker, getting involved. Cryptocurrencies are anonymous. Transactions in these currencies are recorded on databases called blockchain, where transactions are given a unique reference number. Names, addresses, social security numbers and banking information are not required.
This gives the impression that the cashless society is not only on its way, but will eventually replace physical forms of money entirely. This would mean no more searching for change, carrying large amounts of coins, or carrying large sums of cash. It also means that the bad guys would no longer be inconvenienced since there would no longer be a need for banknotes of large denominations that governments try to suffocate, including US$500 and US$1000, Canadian $1000 and the 500 euros of the European Union.
If you think cryptocurrencies are the answer, then ask yourself why Bitcoin millionaires in Britain can’t access their own money. Banks have refused to serve digital currency traders, with banks indicating they don’t want to risk working with the money of people who may have illegally acquired their digital wealth.
As an example, cryptocurrency hedge fund employee Vincent Fraysse allegedly turned an investment of €3,000 or around £2,500 into £3.9 million. Fraysse was quoted in The Telegraph London newspaper on January 27: “After finally finding a bank that would accept me as a customer, there was about seven months of vetting, and then when I finally managed to get out of the money and into a bank account that would actually allow me to use the money, the bank blocked the account for further verification.
A Google search of the question “How do I convert Bitcoin to fiat currency” was answered with the answer, “Most cryptocurrency exchanges do not allow you to deposit funds using fiat currency – however, some do. Here’s how it works: you deposit your Bitcoin into the exchange, then, once the exchange has received your Bitcoin, you can request a fiat withdrawal. The most common way to do this is through a bank transfer (wired).”
According to Coinbase, “…the MCC (Merchant Category Code) for digital currency purchases has been changed by a number of the major credit card networks that allow banks and card issuers to charge fees. additional cash advance, which can be up to 23.99 percent – and is neither charged nor collected by Coinbase.”
On January 27, The National Law Review reported, “As the use of Bitcoin, Ether, and other cryptocurrencies proliferates in the U.S. economy, it may seem inevitable that a comprehensive regulatory regime will develop around of these new assets. So far, regulation has been piecemeal, mostly limited to statements from the Internal Revenue Service (IRS), the Securities and Exchange Commission, and the Office of the Comptroller of the Currency covering individual aspects of cryptocurrency that fall under within the jurisdiction of each agency. ”
The January 12 Forbes magazine headline “Crypto vs. China’s Digital Currency: The Twain Will Never Meet” says it all about China’s attitude toward a monetary system the People’s Republic can’t oversee.
China is more interested in its government-owned and controlled e-yuan. The e-yuan was recently featured in the Alibaba-owned South China Morning Post newspaper. According to the February 4 issue, Zhongguancun Bank in Beijing and NewUp Bank in Liaoning each have permission from China’s central bank to suspend all cash services.
The article continues: “The suspension of cash services in banks has raised eyebrows in China, especially as the country’s central bank has repeatedly reminded ordinary merchants that they must accept banknotes and coins,” continues, “Some private banks are also hoping to become so-called ‘internet banks’, but they face multiple regulatory challenges given Beijing’s crackdown on the internet industry over the past year. .
On Jan. 28, the International Monetary Fund said El Salvador should dissolve the $150 million trust fund the country created when it made bitcoin legal tender and should return any unused funds to its treasury. El Salvador became the first country to adopt Bitcoin as legal tender (alongside the US dollar) in June 2021. The trust fund was intended to enable the automatic conversion of Bitcoin into dollars, or in other words to convert a value electronically in hard currency. .
A January 28 Associated Press report quotes Alina Carare, head of the IMF mission in El Salvador: “What we highlight in the report is that having a digital wallet, which allows people to use digital means of payment and keep their savings there, especially in the United States. dollars, can bring benefits to the economy as well as growth, but again, I am emphasizing the US dollar because the price of Bitcoin is volatile.