Should Governments use Cryptocurrency Technology?

Globally, governments are actively working or exploring the world of Cryptocurrency. Priorities differ but decentralization is the main feature as no

Globally, governments are actively working or exploring the world of Cryptocurrency. Priorities differ but decentralization is the main feature as no one can have a control over them. Funds can be transferred from one bank to another instantly without any administrative holding period or fees.

The adoption of digital currency acting as a virtual currency employs cryptography in order to ensure secure transactions. Most of the popular Cryptocurrencies are anonymous and use a key for identifying a user. There is a possibility to include personal information such as ID number for making a non-anonymous digital currency. Very important application of virtual currency is, it gives an allowance for instantaneous transactions that minimizes time as well as price. This is so because financial intermediaries are not required.

What is Cryptocurrency?

A Cryptocurrency is a virtual coin or simply an entry on a distributed ledger that can store on computers globally. In most of the cases, it consists of all the transactions that have ever occurred for a specific digital currency.

An individual gets engaged in transactions through a crypto wallet. Cryptocurrency wallet acts as software that has interactivity with the distributed ledger. An individual’s wallet is controlled with a help of private key which acts as a code needed for transferring the coin out of a wallet. Every wallet consists of a public key which most of the individuals can use for the purpose of sending the coin to it.

Advantages of Cryptocurrency Technology

Cryptocurrency technology has the power to minimize the price of banking services by offering a near-zero cost alternative. Example of this is an international transfer of money. There are several currency exchanges that charge 2-3% of the virtual transaction fees on the exchangeable amount. Another benefit is regarding the speed. Instead of financial investment settling by banks in 1-3 days, Cryptocurrency technology has the benefit of clearing the transactions in few seconds. In short, this technology will help in maximizing consumer buying power by minimizing the transactional price throughout the world.

Industries benefiting from Cryptocurrencies

Any institution or agency that conducts various online transactions can get an advantage from Cryptocurrency technology. Government and financial industry are the ones to reap out the maximum benefits. Education sectors may also get some advantage. The most impressive thing of all is it’s not just for big enterprises but also for the small firms.

Top Reasons for Involvement of Government in Cryptocurrency Technology

  • Defrauding: – Governments prefer to use new technologies such as Cryptocurrency to defraud its citizens. Such organizations generate illegality to participate in businesses like “online gambling” etc… where issues are created and the significant amount is lost.
  • Generation of Revenue: – Most government organizations generate revenue by taxing individuals as well as businesses. Use of banking services makes it easy to recover from the forceful unpaid taxes.
  • Traditional Money: – Exporters and most of MNC’s get an advantage from Cryptocurrency technology, because most of the income is earned from doing business with international partners, who would prefer to pay in virtual currency.
  • Organized Criminals & Terror Activities: – Government agencies explore the previous records to find out how the transactions are carried out and determine cash funding to originate the respective transactions.

Overall, people are learning about Cryptocurrency trading platform as a payment method and expecting the technology to receive more of government attention. 

Cryptocurrency Regulation around the Globe

Communities are seeking about the Cryptocurrency regulations on a worldwide basis. Government organizations are creating their own operations and it is mandatory to understand the purpose of those agencies.

Final Thoughts

There is a requirement of digital currency that can be integrated into tokens in a simplified manner and accepted globally. Government organizations are looking for more and more ways for establishing the regulations regarding Cryptocurrency use.