Can the United States (US) Ban Bitcoin? A Look at Government if Attempt to Outlaw CryptoAssets
- Bitcoin is code, the US government cannot ban code
- Bitcoin ban ship has sailed but fiat onramps can be targeted
- Can Trump ban Bitcoin?
Governments like to control money and we all know how they control fiat through central banks. As JP Morgan CEO Jamie Dimon said in 2017,
“the bigger these things get… they (govt.) close it down.”
But Bitcoin doesn’t have a CEO or headquarters that can be shut down.
Bitcoin is a software network that runs on a network spread all over the globe. It is a decentralized network designed only to prevent such shutdowns.
Bitcoin is Code, The US government Cannot Ban Code
What Bitcoin detractors forget is Bitcoin is a free speech and can’t be banned in the US, thanks to the First Amendment.
As a matter of fact, Bitcoin is just a code and based on the legal precedent established in the early 90s, a code is a speech. The First Amendment protects users who store their own BTC in a software wallet but it doesn’t hinder the regulatory regimes like New York BitLicense.
Recently, Abra CEO Bill Barhydt at Bitcoin 2019 talked about the Bitcoin’s legality as a free speech.
This is “not a Bitcoin-specific issue,” he said, rather a
“government overreach issue and a free speech issue that I think we don’t take seriously.”
But he says,
“We don’t hear enough of a narrative around Bitcoin as free speech.”
But Bitcoin is code and as has been established, code is speech and speech is protected.
“Sure, but governments don’t [say that], and that’s my problem with this,”
Bitcoin Ban Ship has Sailed But Fiat Onramps Can be Targeted
The US government can’t implement a bitcoin ban, “It’s not possible,” said Barhydt as the Supreme Court has already “opined” on this back in the 90s and now that ship has sailed.
“The question is: What can they do at the edge of the network — the onramps and offramps, the places where they exert control over the banking system, the exchanges, [and the] stablecoins.”
The US regulators can determine crypto-assets too volatile to be sold to the retail investors. President Donald Trump can very well issue an executive order banning US people from dealing in Bitcoin as happened back in March 2018 when Petro was banned. This ban was an act of foreign policy as Petro represented an
“attempt to circumvent US sanctions.”
Having said that, an executive order can be easily overturned by Congress or the courts.
Can Trump Ban Bitcoin?
In 1933, President Roosevelt banned the “hoarding of gold” with an executive order, meaning Trump could possibly find a valid reason to ban dealing in Bitcoin, shares economist and trader Alex Kruger in his twitter thread about “Can Trump ban bitcoin?”
Trump could also go after fiat onramps by forbidding banks to provide services to crypto exchanges.
But the question is would Trump ban Bitcoin? Per his recent tweet, he certainly
“is not a fan of Bitcoin.”
The argument for Trump “not” wanting to ban crypto is it will likely lose him votes while digital assets circumvent the banking system would be the reasoning for Trump wanting to ban crypto.
This, have different implications in the form that crypto represents a threat to the banking system and we are already seeing the attempt to ban Facebook’s Libra. Crypto is often perceived as a facilitator in illegal activities as said so by Trump as well.
Cryptos could also reduce Washington’s ability to impose economic sanctions, a tool to gain competitive advantage. Venezuela and Iran are the prime examples of creating their own crypto to avoid sanctions.
– A Bitcoin ban in the US is feasible
– Ban could come via a Trump executive order
– Ban could be over-turned
– Probability of a ban is extremely low
– Probability increased last week
– Regulatory risk keeps many institutions away
– A ban would see $BTC crash rapidly pic.twitter.com/VEz5y58arL
— Alex Krüger (@krugermacro) July 15, 2019
Do you think the US would ban Bitcoin?