Does Cryptocurrency Need Government’s Help?

By Rushali Shome

We know that cryptocurrencies are nothing but digital currencies built on a decentralized, peer-to-peer format and secured with cryptographic algorithms. Now, considering that these were essentially meant to be decentralized, to exist outside the ambit of centralized control, the role of the government with regard to crypto becomes quite dicey. However, despite issues of incompatibility between cryptocurrencies and governments, some governments have been brave enough to take on the world of crypto with adequate equanimity but the question remains: what is the role of crypto in all of this? Does cryptocurrency need government’s help to survive?

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Crypto and Governments: A Brief History

As we have already mentioned, crypto and governments have a tenuous bond. This is because crypto is premised upon the notion of decentralization and any government tries to control its currency flow by means of a “central” bank.

This tends to bring in a very fundamental conflict in the sphere of cryptocurrencies. This also makes governments somewhat suspicious if crypto in general.

Despite all of this, some governments have taken the initiative to work with crypto. A prime example of a this is Venezuela, which came out with the oil-backed Petro cryptocurrency to salvage its fledgling economy.

Countries like Malta and Switzerland have also seen their governments being open to a crypto expansion without feeling too threatened.

In recent times, even Argentina has expressed interest in making use of crypto, as its finance officials expressed to the media. Clearly, there are quite a few governments ready to roll out the red carpet for crypto but is it enough?

Role of Governments in Helping Cryptocurrencies

More often than not, governments choose cryptocurrencies to help themselves, usually to save their own economies from faltering completely.

Countries like Switzerland and Malta also benefit from the high amount of crypto trading that goes on in their respective countries. Having the ability to harness taxes from a newly emerging fintech field is what keeps them going and keeps filling their coffers.

Now, the question is whether or not crypto itself benefits from it. The answer is that it does see some amount of adoption increase owing to increased government interest but also suffers if the interest inches over to become “interference”.

So the thing to remember is that governments can help cryptocurrencies indeed, but only to a certain extent. If that extent is crossed, then it turns into interference which ultimately takes away from crypto’s decentralization.

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Rushali Shome

Rushali Shome is a history undergraduate with a keen interest in puns, politics and beyond. When not typing away furiously in the “Notes” section of her phone, she can be found trying to catch the eye of servers at restaurants or weddings for a second helping.

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