Governments seem to be taking an “if-you-can’t-beat-them-join-them” attitude toward Bitcoin, and digital money in general. But I believe this may be a red herring: a bid for government control of the Bitcoin economy.
I wouldn’t be surprised if governments started accepting Bitcoins for tax payments in the near future — possibly as a means of controlling significant portions of the Bitcoin economy. They might even start encouraging payments in digital currencies. After all, what better way to manipulate an asset class than to own a significant portion of it?
Governments are inherently inept and corrupt, and I typically disagree with those who promote or defend centralized, bureaucratic authorities. My skepticism extends to some favorable reactions from global governments recently, regarding Bitcoin and cryptocurrencies. They seem to sitting on the sidelines, glaring at the new technologies with a cautionary and inauthentic approval — much like a rancher might stare at a young pig — imagining how good it will taste once it matures.
Digital currencies are threatening governents’ oligopolistic control of capital flows. Surely their proliferation won’t be this easy. But then again, I return to the heart of this issue: what can governments really do to stop all of this? And perhaps that is the driver behind this hesitation.