Daily Archives: 27. März 2021

You are browsing the site archives by date.

American bitcoin ban ‚very likely‘

Ray Dalio: American bitcoin ban ‚very likely‘

Is a bitcoin ban looming in the US? Star investor Ray Dalio thinks this scenario is entirely possible. In an interview with Yahoo Finance, the founder of the hedge fund Brdigewater Associates paints the devil of a Bitcoin ban Made in USA on the wall – and draws parallels to the gold ban in the 1930s.

If Ray Dalio has his way, a Bitcoin ban is anything but an impossibility. The reason: central banks and governments have a problem with an asset escaping their control. Especially if it is Bitcoin Future preparing to compete with fiat money.

They don’t want other money operating or competing because things could get out of control. So I think it’s very likely that [Bitcoin] will be banned in certain circumstances, just as gold has been banned.
Ray Dalio to Yahoo Finance

Dalio is referring to a 1933 presidential decree by then US President Franklin D. Roosevelt restricted the ownership of gold and certificates to the equivalent of 100 US dollars. The background to this was the Great Depression, which at the end of the 1920s caused US citizens who could afford it to increasingly flee to gold as a store of value. Because the US dollar was still backed by gold at that time, the Federal Reserve (Fed) could only start the money printing machine if it had sufficient gold reserves. At the end of the 1920s, the Fed ran out of gold. The reserve was no longer sufficient to meet the requirement of 40 per cent backing for the national currency – mainly because it wanted to print even more dollars. Private owners who held more than the allowed 100 USD in gold had to exchange their precious metal for fiat at the Fed.

Even in our latitudes there has already been a ban on gold. At the height of the inflation of the Reichsmark, Reich President Friedrich Ebert had banned private ownership of the precious metals gold, silver and platinum in 1923. Here, too, the aim was to stabilise the country’s own currency after a serious economic crisis. In the Third Reich, the law was tightened again: here, the commercial possession of gold (for example, by jewellers) was also prohibited.

BTC scares banks

Against this background, Dalio’s analogy is quite understandable: Many observers see the billion-dollar bailout packages that have been and are being put together by governments around the globe to contain the Corona fallout as possible fuel for inflation in fiat currencies, first and foremost the US dollar. The example of India already shows how a government is resisting Bitcoin. A Bitcoin ban is becoming increasingly likely here

Now, every Hodler knows that you can’t easily shut down the Bitcoin network because there is no central server. On a technological level, a Bitcoin ban is thus practically impossible to implement. Bitcoin is not considered uncensorable for nothing. However, governments can prohibit companies and financial service providers from doing business with cryptocurrencies or companies. For example, it could be made impossible to exchange one’s Bitcoin for fiat money in one’s own country. Due to the transparency of the Bitcoin blockchain, the transaction flows of Bitcoin can be traced – not only Europol is already busy investigating this. But there is an antidote here, too: Bitcoin mixers or Coinjoin wallets like Wasabi, for example.

Ray Dalio himself would probably not support a ban. In January, the hedge fund legend came out as a Bitcoin enthusiast.