Bobby is the founder and CEO of Ballet, a company that provides simple, secure cryptocurrency storage solutions for the global mainstream market.
“The most important development in cryptocurrency regulation this year was El Salvador’s adoption of Bitcoin as legal tender. This fulfilled and exceeded my prediction five years ago, in December 2016, that a small country’s central bank would add Bitcoin to its foreign exchange reserves. Although El Salvador is a small country, the implications of this change will be profound. The Federal Reserve, the IMF and the Bank of England have stated that they are ‘concerned’ about El Salvador’s declaration of financial independence. Their concern is hardly benevolent. It’s based on the fear that if one country flourishes because of Bitcoin, it will trigger a cascading global exodus from the debt-based dollar system.
The United States won’t be following El Salvador’s example of making Bitcoin legal tender, but that’s not an obstacle to Bitcoin’s success. U.S. regulators and tax collectors have correctly decided to treat Bitcoin as an asset akin to gold, not as a currency or security. Fiat currency is backed by debt, and securities are backed by promises of future earnings; Bitcoin is backed by nothing except its proven utility as a permissionless, immutable, inflation-resistant ledger. So, I expect regulators to focus on squeezing more tax revenue out of Bitcoin holders rather than outright prohibition.”