Government intervention in cryptocurrency can only lead to one thing-Disaster. Government all over the world has been talking about creating their digital currency (CBDC). Just a few weeks back News of the Nigerian Government creating a digital currency ( Central Bank Digital currency) of their own started spreading. It is said to be launched by October, to be named E-naira. The validity of the News is still unknown but people got excited and see it as an acceptance of cryptocurrency by the Government. The same Government placed a ban on Financial institutions accepting any cryptocurrency-related transaction.
Before going further, please note that this article is written by someone who is new to the crypto world and everything written is entirely his opinion. It might not be to your expectations or standard, you might disagree or have a few corrections, feel free to drop it in the comment section.
So many countries across the globe have made moves towards accepting cryptocurrency, the latest and currently most popular is El Salvador's announcement of transacting with bitcoin. Since the announcement, it's been a roller coaster experience for the Government. Probably the choice of coin they chose to go for caused the uproar. There has been different Protests and outrage from the citizens ever since.
One of the core values of cryptocurrency is the fact that it gives on control over his own money. I can send and receive any amount without being monitored. No restriction or regulation stop me from sending or receiving money on a certain day or time. No monthly charges or unnecessary bank charges. Someone right here in Nigeria can send money to another person from another country without stress.
Reasons why the Government are against cryptocurrency
Terrorism Tool
They believe cryptocurrency is the tool people use in funding terrorism. Since it is hard to monitor transactions made into various wallets, to know the source of funding and to which wallet the fund is going is hard for the Government.
During the End sars protest which I talked about in one of my previous articles. Donations were made by Various celebrities across the world to support the movement. Bitcoin and other coins were sent from people in the diaspora and top celebrities. Shortly after the Protest ended, the Federal Government placed a ban on banks accepting any form of cryptocurrency transactions, how is it possible for this same government to wake up overnight and start backing cryptocurrency shows that they have something up their sleeves.
A Threat to fiat.
Cryptocurrencies like Bitcoincash are a threat to fiat. The low transaction, quick and easy attributes of the coin makes it a substitute to fiat. Moreover, the rate at which the Nigeria Naira is losing its value each day has pushed so many people into transferring a good part of their money into crypto. As of the time of writing this $1 is equivalent to N525. What N1000 can buy 10 years ago is what N5000 can't buy today. But N1000 bitcoin 10 years ago will be something bigger today.
Used for fraudulent transactions
One of the biggest problems facing the country right now is the issue of cybercrimes popularly known as "Yahoo yahoo". The youths indulge in all forms of cyber crimes and escape being punished since cryptocurrency is used in transacting. Bitcoin in particular is a popular form of payment these guys accept.
REPERCUSSION OF HAVING A DIGITAL CURRENCY MADE BY THE GOVERNMENT
Before we all get excited and happy, let's look at the motive behind the creation of this proposed coin. I said earlier that the FG asked all banks to stop facilitating/accepting any cryptocurrency transactions. Why are they now showing interest in it all of a sudden? Myles Monroe said and I quote "If the purpose of a thing is unknown, abuse is inevitable".
If the digital currency is launched and accepted by everyone, we are going back to where we started. It will be no different from the notes used before. The Central bank will still have the right to pry into anybody's account. Transactions going out and coming in will still be monitored, which kills the purpose of cryptocurrency.
Your 1000E-naira today won't appreciate. Though one shouldn't put all his money into cryptocurrency, it's known to many that your $1 today will someday be $10 if you chose the right coin to invest in and also have the patience to hodl in the face of temptation and unstable market. But the digital currency which the FG will create will be the same as the note. It reduces in value every time
An unlimited amount of digital currency will be in circulation. Just the way they do with the Paper note- they mint more of it each day. The same thing will be done to this coin. I'm no soothsayer or prophet but the way the Government has acted in previous times shows a clear indication towards this part.
Conclusion
Digital currency that will be controlled by the government is fiat in disguise. If it is allowed with the belief that the government is now supporting cryptocurrency, I'm sorry to say we all will be disappointed in the long run.
If the government truly are in agreement with the use of cryptocurrency, then they can adopt any of the existing ones. I will only advise them not to choose one that will be inconvenient for the citizens to use just like El Salvador's choice.
Instead, they should look for coins with a low transaction fee, a peer to peer tool with lightning speed. Litecoin, Bitcoincash and some other coins have a low transaction fee. but I will go for BCH, for it has a unique community compared to that of others. I'm not saying this because I'm writing on readcash- a site set up for the promotion of Bitcoincash. But because it's something I've seen and I now truly that BCH is destined for greatness.
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It is a complete fraud for countries to say that they will issue cryptocurrencies. Efforts to somehow control cryptocurrencies. I don't think it can be put into practice, it's just that we're doing something about crypto, it's a different way of saying we're not empty.