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Thursday, June 20, 2024

Ray Dalio: American Bitcoin ban “very likely”

Is there a threat of a Bitcoin ban in the USA? Star investor Ray Dalio believes this scenario is quite possible. In an interview with Yahoo Finance, the founder of the hedge fund Brdigewater Associates paints the devil of a Bitcoin ban Made in the USA on the wall – and draws parallels to the gold ban in the 30s.

If Ray Dalio has his way, then a Bitcoin ban is anything but an impossibility. The reason: Central banks and governments have a problem with an asset that is beyond their control. Especially when it is preparing to compete with fiat money.

They don’t want other funds to operate or compete because things could get out of hand. So I think it is very likely that [Bitcoin] will be banned under certain circumstances, just as gold was banned.

Ray Dalio to Yahoo Finance

Dalio is referring to a presidential decree from 1933, with which the then US President Franklin D. Roosevelt restricted the possession of gold and certificates to the equivalent of 100 US dollars. The background to this was the Great Depression, which at the end of the 20s allowed Americans who could afford it to flee to gold as a store of value. Because the US dollar was still backed by gold at that time, the Federal Reserve (US Federal Reserve, Fed for short) could only start the money printing machine if it had a sufficient gold reserve. At the end of the 20s the US Federal Reserve ran out of gold. The reserve was no longer sufficient to meet the requirement for 40 percent coverage of the national currency – mainly because it wanted to print even more dollars. Private owners who held more than the permitted USD 100 in gold,

Even in our latitudes there has already been a gold ban. At the height of the Reichsmark inflation, President Friedrich Ebert banned private ownership of the precious metals gold, silver and platinum in 1923. Here, too, it was about stabilizing the local currency after a serious economic crisis. In the Third Reich there was a further refinement: Here the commercial possession of gold (for example at jewelers) was prohibited.

BTC worries banks

Against this background, Dalio’s analogy can be fully understood: Many observers see the billion dollar rescue packages that were and are being put together by governments around the world to contain the consequences of the corona as a possible fuel for inflation in fiat currencies, above all the US dollar . The example of India can already be seen how a government is resisting Bitcoin. A Bitcoin ban is becoming more and more likely here.

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Can a Bitcoin ban even be implemented?

Now every Hodler knows that you cannot simply switch off the Bitcoin network because there is no central server. At the technological level, a Bitcoin ban is practically impossible to implement. Bitcoin is not considered censable for nothing. However, governments can prohibit companies and financial service providers from doing business with cryptocurrencies or companies. For example, it could be impossible to exchange your Bitcoin for fiat money in your own country. Due to the transparency of the Bitcoin blockchain, the transaction flows of Bitcoin can finally be traced – not only Europol is already busy investigating. But there is also an antidote here: Bitcoin mixers or coinjoin wallets like Wasabi, for example .

Ray Dalio himself would not be in favor of a ban. In January, the hedge fund legend as Bitcoin enthusiast has outed .

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