Cryptocurrencies are not having a good time right now.
An estimated half trillion dollars has been erased with the recent market crash, ending the mania we’ve seen in the space since late last year. As stunning as the numbers are, this is nothing new for the infamously volatile crypto industry. More worryingly for cryptocurrency, and for anyone who wants to have an actual say over their own money, governments around the world are taking an increasingly anti-crypto stance, seeing it, rightfully, as a threat to their control over people’s financial lives. If these efforts are not resisted, people will lose the best chance to use their money as they see fit, ceding control once more back to a state which does not have their best interests at heart.
From Nigeria to China, from Turkey to the USA, countries are all cracking down on cryptocurrency with ferocity. The spike in cryptocurrency activity since the global shut-down has clearly spooked the states. Without a trace of irony or shame they have all cited concerns over terrorism and consumer fraud, even as they deal billions of dollars in weapons and impoverish their citizens through incompetent and classist economic policy. Cryptocurrency, for all its very real faults, reveals that the people are better stewards of their money than the state is. Coupled with its ability to easily move across borders, and it’s easy to see why states everywhere are uniting against the technology.
El Salvador, bucking the trend, has legalized Bitcoin, allowing taxes to be paid in Bitcoin and ordering merchants to accept the cryptocurrency. While legalization is better than the restrictions we are seeing elsewhere, it comes with its own set of problems. For one, merchants don’t have a choice but to accept Bitcoin, which constrains their freedom. In addition, the government is partnering with digital wallet company Strike to rollout Bitcoin-friendly financial infrastructure. While El Salvador does need an infrastructure upgrade to fully adopt Bitcoin, the partnership between the government and Strike can easily lead to a monopolistic environment, in which Strike is able to thrive without competition on the backs of the Salvadorans.
The core of the issue is this: People should be able to use whatever medium of exchange they want without government interference.The anti-crypto crackdowns and El Salvador’s Bitcoin legalization are two sides of the same coin — in both cases the state assumes power over the use of cryptocurrencies, taking that power out of the hands of the people. In this way a financial global commons becomes subsumed by “national interest” and the will of plutocrats, while the people are once again stripped of their freedom. This is the hidden danger of El Salvador’s Bitcoin legalization: It frames the cryptocurrency conversation as a question of government support, when the reality is that anyone with an internet connection can use cryptocurrency regardless of what the government wants. A tool that delegitimizes the state is twisted into a statist prop, and we all end up back where we started: With the state in control of our financial futures.
We must not forget that at the end of the day, the state does not have your financial interests at heart, the state has the state’s financial interests at heart. Getting bogged down in discussions of cryptocurrency legality misses the forest for the trees. The best way to ensure that cryptocurrency remains available for all is to educate yourself and others on how to get it, secure it, and use it, regardless of state action.