US National Intelligence Council: Digital currencies pose a danger to the dollar and other currencies

Exchange Rates 10.04.2021 analysis

Bitcoin continues to target new price records, however, a report by the National Intelligence Council was published in the United States, which states that bitcoin and other digital money pose a threat to fiat money, central banks, and the economies of the world. Among the cryptocurrencies, the authors of the report believe that central banks’ ability to influence and control money rates is decreasing, and the influence of monetary policy on the economy is weakening. Banks will no longer be able to fully control the money supply. However, the report was not only about cryptocurrencies, but also digital yuan and digital currencies that may be issued by other central banks. “Digital currencies are likely to become widespread in the next twenty years,” the report says. Experts also said that the speed of the spread of cryptocurrencies in the world will depend on the control of this process by governments and central banks. Thus, certain state structures negatively assess the future impact of the cryptocurrency sphere on the economy and the ability of the authorities to control as many processes in the financial segment as possible. We still believe that the cryptocurrency segment will not exist for a long time in the form that it is now, that is, practically uncontrolled by the states. Yes, the governments of some countries have already introduced bans on mining, storing, and transferring cryptocurrencies on their territory. Some have introduced a tax base for the cryptocurrency segment. But the most important thing – full control of the movement of all funds, or at least most of the money or its alternatives – has not yet been achieved. Moreover, there are no prerequisites for creating a mechanism that would allow tracking the movement of bitcoins and other cryptocurrencies. When such a mechanism appears, bitcoin will either dramatically lose its popularity or will remain to exist only as an investment tool, most of which will already be distributed by that time among large institutional investors. These conclusions do not mean that bitcoin will grow to $ 1 million or, on the contrary, will collapse down by 90% of the value. Hardly anyone could have predicted that during the global crisis, bitcoin will grow from $ 10,000 to $ 60,000. Hardly anyone could have predicted that Bitcoin would grow to $ 20,000 in 2017. Hardly anyone could have predicted the emergence of digital currencies at all, which will excite the whole world for more than 10 years. Thus, making forecasts for bitcoin for a couple of years ahead does not make any sense at all. If not today, then in a year the governments of large countries of the world may realize that bitcoin is harmful to them, and impose a ban on it. Or come up with other norms that will greatly reduce its attractiveness. You don’t have to go far for an example. Just this week, US Treasury Secretary Janet Yellen proposed to all countries of the world to introduce a single corporate tax, which will avoid the leakage of capital from rich countries with high taxes. Now, if the largest countries in the world agree on this issue, then corporations like Apple or Tesla will not be able to register separate divisions in Cyprus and pay scanty taxes to the local treasury there. And all the small countries of the world will have to agree to such unfavorable conditions, otherwise, there will be sanctions.

Source: https://www.instaforex.com/forex_analysis/275737/

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