Governments are increasingly regulating and banning Bitcoin and other decentralized currencies. Veteran investor Jim Rogers, who co-founded the Quantum Fund with billionaire investor George Soros, thinks this could lead to more bans around the world.
Rogers isn’t alone in his views. Bridgewater’s founder, Ray Dalio and The Big Short’s founder Michael Berry expressed their concerns on governments’ potential desire to outlaw cryptocurrencies.
Jim Rogers Sees a Ceiling for Cryptos as Currency
Rogers stated that almost all governments worldwide are currently developing their own digital money. These are called Central Bank Digital Currencies (CBDCs).
According to Roberts, as long as crypto is used as a trading vehicle governments won’t interfere much, but the moment crypto becomes successful as currency, Governments will implement regulations to make sure a national cryptocurrency is adopted.
The investor used China as an example to support his views. The nation is imposing a digital transaction within borders for almost all domestic activities, like taking a taxi or buying small retail goods, and it has launched CBDC trials.
For the Chinese people, a physical wallet (carrying notes and credit/debit cards) has been replaced by smartphones. Rogers sees increasing government regulation as the biggest threat to Bitcoin, which is the case in China.
When asked about Federal Reserve Chairman Jerome Powell’s comparison of Bitcoin with gold, Rogers stated that history indicates precious metals would probably have a healthier future than cryptocurrencies because gold and silver are not trying to compete with central bank issued fiat currencies.
New Ideas are Emerging in Some Areas
Hester Peirce, commissioner at the U.S. Securities and Exchange Commission (SEC) expressed that it would be foolish if governments try to outlaw Bitcoin, simply because its essentially a decentralized self regulated peer-to-peer technology.
Peirce compared these banning efforts to trying to shut down the internet.
However, Peirce also commented that during these last three years as chairwoman at SEC, institutional investors are applying more pressure to create a regulatory framework to understand what is legally allowed in US markets.
According to Peirce, some regulation would be beneficial for the crypto ecosystem.