Can the Government Ban Bitcoin? Three things you need to know today

The notion that the US government will ban Bitcoin is popular for good reason.

Bitcoin threatens a significant source of government power – the power to create fake money out of thin air and force everyone to use it.

That’s because Bitcoin can give monetary sovereignty to the individual and make central banks obsolete – along with their confetti currencies.

That is no small achievement.

It is a historical development that largely changes the status quo between the rulers and the ruled. It is similar to the invention of gunpowder, the printing press and the Internet.

There is no doubt that the US government would want to protect their racket from an encroaching money competitor the same way the Mafia does when a rival encroaches on their turf.

The $64,000 question is whether they will succeed.

Friedrich Hayek, the great Austrian free market economist, once said:

“I don’t think we’ll ever have good money again until we take the thing out of the government’s hands, that is, we can’t take it violently out of the government’s hands, all we can do is by some sly roundabout introduce something that they don’t can stop.”

Hayek is right.

By their very nature, governments never peacefully relinquish power. And if it’s not about taking power out of their hands by force, then the only way to do that is by “introducing something they can’t stop.”

Is Bitcoin the solution?

Many believe the answer is “no” because the government will shut it down.

Can someone shut down Bitcoin?

Bitcoin has no central authority and a single point of failure.

Instead, it runs on a decentralized, voluntary and growing network spread across the globe on over 15,384 computers – many of them cleverly hidden – in nearly 100 countries.

With Bitcoin, there is no central location for a SWAT team to raid. There is no CEO to arrest. Governments can do nothing but play an endless and fruitless game of mule all over the globe.

Even if the US and Russia engaged in an all-out nuclear war and destroyed most of the Northern Hemisphere, Bitcoin would not miss a beat in the Southern Hemisphere.

In short, no government can kill Bitcoin on its own.

To even have a chance of stopping Bitcoin, every government in the world would have to successfully coordinate at the same time to shut down the entire Internet everywhere and then shut it down forever.

Even in that unlikely scenario, radio signals could still transmit the Bitcoin network, and small portable solar panels could power the network’s computers. Furthermore, satellites are constantly transmitting the Bitcoin network down to Earth.

In short, every aspect of Bitcoin is genuinely decentralized and robust – and getting stronger every day. Barring an inevitable global return to the Stone Age, Bitcoin appears unstoppable.

The cat is out of the bag. Bitcoin is bigger than any government.

If they can’t shut it down, won’t they ban it?

Algeria, Bangladesh, Bolivia, China, Ecuador, Egypt, India, Iran, Kyrgyzstan, Morocco, Nepal, Nigeria, Saudi Arabia, Thailand, Turkey and others have tried to ban Bitcoin. However, they all failed as adoption in these countries continued to increase.

Could the US Government Try to Ban Bitcoin?

The US President can issue an Executive Order banning Bitcoin.

Remember that Executive Order 6102 prohibited gold ownership by US citizens from 1933 until it was repealed 41 years later.

However, that outcome is unlikely for three reasons.

Reason #1: Code is protected speech

Bitcoin is simply computer code.

US federal courts have ruled that computer code is equivalent to speech protected by the First Amendment to the US Constitution.

On the other hand, the Constitution is not a reliable protector of rights, as the Covid hysteria, the war on terror and the war on drugs have all proven. So I wouldn’t rely solely on the US Constitution to protect Bitcoin.

Nevertheless, the prior precedent ruling the code as equivalent to protected speech complicates any attempt to ban it.

Reason #2: Regulatory clarity already exists

The US government has defined Bitcoin as a commodity and property.

The IRS, SEC, CFTC and other federal agencies have provided Bitcoin with clear regulatory and tax frameworks.

It has helped many large US businesses get into Bitcoin, including many large financial institutions. Reversing these policies would generate significant backlash and be challenging – but not impossible – to implement.

Reason #3: Banning Bitcoin is impractical

Public prohibitions can limit something, but they cannot make something valuable and desired by many people disappear by passing a law.

Consider the governments of Argentina, Venezuela and a number of other countries that have laws restricting their citizens from accessing US dollars.

However, these laws have little effect on citizens’ willingness and ability to use them. Instead, these actions create a thriving black market or, more accurately, a free market.

Similarly, consider how successful governments have been in banning cannabis over the decades. Despite their best efforts, cannabis has always been available in most major cities.

Trying to enforce a ban on something digital and borderless like Bitcoin is completely impractical. Bitcoin will be far more challenging for governments to ban than the US dollar or a plant.

Even if it was convenient to ban Bitcoin, it is already too late.

There is a critical mass of Bitcoin advocates among major corporations, politicians and ordinary people.

They bring all their lawyers, lobbyists and political connections to potentially advocate for Bitcoin. There is a lot of political firepower. And their numbers are only growing.

According to a survey by NYDIG, 46 million Americans own Bitcoin. That’s about 22% of all adults in the United States.

Supporting a ban on Bitcoin means going against tens of millions of Americans – not a small number of whom are wealthy, powerful and well-connected.

In short, banning Bitcoin won’t help anyone win an election.

Bitcoin has already reached escape velocity. In other words, it’s too politically popular to outlaw, and every day it’s getting stronger as adoption grows.

The bottom line

Although banning Bitcoin would be politically unpopular and unconstitutional, the US government could still consider the move if it could do so effectively — but it can’t.

So the US government has to adapt to that reality. In fact, it has already done so by providing Bitcoin with a clear regulatory framework for businesses and investors.

When you put it all together, you have an unstoppably superior form of money that is conquering the world.

It is not difficult to see where this trend is going. It is a monetary revolution.

Nevertheless, many still believe that the government will shut down Bitcoin or otherwise ban it.

That perception gap is a blessing, as it allows us to exploit this information asymmetry with investments that take advantage of this powerful trend.

Editor’s Note: If you want to navigate the complicated economic and political situation unfolding, watch this newly released video from Doug Casey and his team.

In it, Doug reveals what you need to know and how these perilous times can affect your wealth.

Click here to watch it now.