Bitcoin and other virtual currencies have been growing all over the world, but regulatory agencies and governments did not develop clear rules about how to tax them and how to regulate them. This is making more difficult for companies to operate in an unstable regulatory environment that does not provide clarity.
Another issue that has been in the media during the last months is related to the U.S. Federal Reserve Bank (FED) that has been increasing interest rates during this year and it is planning to increase them two times more in 2019. Ron Paul, a recognized American politician that was a presidential candidate both in 2008 and 2012, has been criticizing the FED for the decision to increase interest rates. At the same time, he has backed virtual currencies.
In a recent tweet, he said that the FED has no idea about what is doing. Furthermore, he says that the Federal Reserve Bank is manipulating prices, distorting the economy and making decisions looking at data from a distorted economy. He has also attacked central banks all over the world saying that they produce ‘economic delusions.’
The Fed has NO IDEA what rates should be.
The Fed manipulates prices, distorts the economy, and makes decisions by looking at the "data" of a distorted economy.
Central planning produces a world of economic delusions.
America needs to get back to reality.
End The Fed! pic.twitter.com/achfl4uIQ8
— Ron Paul (@RonPaul) December 19, 2018
In the past, he wrote a Tweet in which he asked users what they would do if they receive a $10,000 gift and they had to hold it for 10 years. 50% of the people that voted in the poll said that the would like to receive it in Bitcoin. Bitcoin is an asset that has very high growth potential.
At the same time, he has also mentioned that precious metals and virtual currencies should be exempted from taxes. This would allow users to mitigate the consequences of a FED-induced recession by the FED.
On the matter, he commented:
“The only way to avoid crisis is to force Congress to end our monetary madness. The first steps are passing the Audit the Fed bill, allowing people to use alternative currencies, and exempting all transactions in precious metals and cryptocurrencies from capital gains taxes and other taxes.”
Virtual currencies have been created in order to avoid the traditional financial system. It was created back in 2008 when the world financial crisis started and spread all over the world. Digital assets could play an important role in protecting investors during currency or inflationary crisis. An important feature of virtual currencies is the fact that they are not correlated to traditional assets and the have incredible potential for the future.