Cryptocurrencies seem to fit into the USA perfectly – yet the country appears to be reluctant to the idea of decentralized money.
The topic of cryptocurrency utilization in the United States is constantly recurring on many occasions. Despite being the leader in new technologies and the birthplace of many high tech companies, decentralized money is still a debatable matter in this country. Last year was exceptionally hard for crypto in that matter, because of the ongoing legal fight with Facebook’s stablecoin, Libra. We got used to the situation when the American market is an inhospitable ground for cryptocurrencies. But what exactly has caused this situation?
The cradle of crypto
The American aversion to cryptocurrencies seems especially bizarre in the country, which is an origin place of the blockchain technology itself. Although the identity of Satoshi Nakamoto still remains unknown, many other crypto developers began their work in the United States – for instance, a blockchain technology pioneer, Hal Finney, who was largely involved in the development of the first cryptocurrency.
With the first projects and developers, the first crypto community appeared. Although the overall idea of Bitcoin was transnational, the initial group of its enthusiasts originate mostly from the USA. Cryptocurrencies appeared to be a natural enhancement for the American economic system, which is strongly attached to values such as freedom and independence. The recent history, however, proved that this match works only in theory.
At first, the United States government didn’t really care about the cryptocurrencies. The problems started when the idea of decentralized money became more popular, and some of its realizations appeared to be in conflict with the law. It was the moment when the authorities started to be more interested in this topic, paying attention to two particular cases.
The first one applies to cryptocurrency utilization in money laundering, tax evasion, and any other financial crimes. Because of the high anonymity of decentralized assets, they can easily slip just under the radar of law enforcers. It eventually led to a tightening anti-money laundering policy, which resulted in popularization of Know Your Customer (KYC) procedures
High privacy of cryptocurrencies was also the reason for the second problem which the authorities have with Bitcoin: the potential for illegal trade. Cryptocurrencies quickly found their place on darknet marketplace such as Silk Road, offering people a chance to buy various illicit goods anonymously. Although the best days of such dealings are already behind us, they still cast a shadow over the good name of the crypto industry.
Afraid of corporations
However, the real war between the government and cryptocurrencies began with the announcement of Facebook’s attempt to create its own cryptocurrency, Libra. It met with a strong objection from the side of the American authorities, which caused the ongoing regulatory discussion about the decentralized assets.
Although the main subject of the conflict was the government’s fear of big corporations gaining power to issue their own money, in most cases it concerned common cryptocurrency fans. For example, it forced American crypto exchange Poloniex to move outside the USA borders, making its users unable to trade there.
But that’s all the authority’s perception of the decentralized money. What about the voice of people? According to the research carried out by Finder at the beginning of 2018 (still before the major downfall, which occurred at the end of the year), only 8% of Americans have invested in cryptocurrencies. The reason for this, according to the survey, was the high risk and lack of a real need to use the decentralized money
Is this research worrying? Not necessarily. The next part of the survey showed that the popularity of decentralized money is growing with every generation. Millennials are far more eager to trust cryptocurrencies than their predecessors. Maybe bitcoins will be even more popular among the generation Z (or zoomers, as the Internet has recently started to call them).
Faith in younger generations isn’t the only hope which the cryptocurrency industry has. Among American authorities, various politicians support the idea of decentralized money. One such person is Ian Calderon, the Majority Leader of the California State Assembly, who is trying to popularize it in his state. Other states are also proposing various ideas for blockchain or cryptocurrency utilization. However, all those actions are still only a drop in the bucket. Without proper regulation on a national scale, the cryptocurrencies will always be only a margin of the American economy.
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