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CryptoLearner

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This is clearly the beginning of a long battle between FI and the crypto space, especially decentralised private crypto.   Do you think the US government will ever shut down exchanges if the profits become too large with crypto, like they did with the online gambling casinos?  Or do you think they will find some way to work with the markets?   It would help if we had a crypto attorney in the forum.

Edited by CryptoLearner

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16 minutes ago, CryptoLearner said:

This is clearly the beginning of a long battle between FI and the crypto space, especially decentralised private crypto.   Do you think the US government will ever shut down exchanges if the profits become too large with crypto, like they did with the online gambling casinos?  Or do you think they will find some way to work with the markets?   It would help if we had a crypto attorney in the forum.

I like this topic, but if I respond, I want to make it clear that I disagree with the overall premise; I don't think there's a battle between FI (I'm assuming you mean government or traditional mainstream banking) and crypto. 

Yet.

The size of the overall crypto market is still very small, but China is correct in identifying the crypto market as a long-term weakness in its ability to determine central monetary policy.  The US?  Europe?  Japan?  Those countries will not respond favorably to a heavy-handed policy I think. 

India is a question mark for me - I'd defer to somebody from that country but I think India plays by its own set of rules; sometimes it allows consumer freedom, and sometimes (with the latest elimination of cash) it tries to impose restrictions and tough policies. 

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20 minutes ago, CryptoLearner said:

This is clearly the beginning of a long battle between FI and the crypto space, especially decentralised private crypto.   Do you think the US government will ever shut down exchanges if the profits become too large with crypto, like they did with the online gambling casinos?  Or do you think they will find some way to work with the markets?   It would help if we had a crypto attorney in the forum.

No, I doubt it. Any government trying to shut down cryptos in general of which decentralized exchanges will be an integral part, within its borders will likely only be contributing to its own economic demise when this space goes and remains mainstream.

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2 minutes ago, CryptoLearner said:

Lets get the experts in here right now.  What parts of the world are the MOST crypto friendly at the moment?

Japan and India come to mind, and South Korea has gone nuts with crypto trading.

Oops, not an expert, just crypto hodler opinion :)

Edited by enrique11

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Some FIs are on board and others are not.  In regards to what Ripple is trying to do (i.e., make cross border payments faster and cheaper), FIs currently earn approximately $2 trillion in fees on these payments.  As a result, some (though not all) are not in favor of Ripple's vision.

In regards to exchanges being shut down outside of China, I think it is a possibility but less likely.  Nonetheless, anyone who invests in this space should recognize it is a possibility and plan accordingly.  

IMO, the primary problem is there is no exchange that can serve FIs that well.  Perhaps GDAX, but even that has its limitations (i.e., the Ether flash crash).  I know there are some exchanges under development who intend to serve FIs only.  

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4 minutes ago, enrique11 said:

No, I doubt it. Any government trying to shut down cryptos in general of which decentralized exchanges will be an integral part, within its borders will likely only be contributing to its own economic demise when this space goes and remains mainstream.

I hope so.  China seems to understand that if they keep closing exchanges, they are going to be left far behind as the rest of the world explodes with profits

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I agree with most posts here.  If exchanges and gateways are following the laws, there is no legal reason for them to be shutdown and attempts to do so based on "profits" would face quick and likely winnable lawsuits.  They'd need to pass new laws that current exchanges couldn't comply with.  The Obama admin was pretty hostile to crypto and I think it's still too early to know if the Trump admin will be equally hostile or worse.  I see deregulation throughout other sectors happening now but not much on the financial side yet.  It's a wait and see on that.  Overall...if exchanges are in compliance now, there's no reason to assume they won't be in the coming few years.

Edited by Coinseeker

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42 minutes ago, CryptoLearner said:

I hope so.  China seems to understand that if they keep closing exchanges, they are going to be left far behind as the rest of the world explodes with profits

I believe the main issue posed here and the reason for closing the exchange market is because if the yaun goes to the crypto markets and out elsewhere in the world, it is no longer yaun and decreases the total marketcap of china respectively.  This may also be why there were withdrawal limitations posed.

 

Maybe I am wrong!

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The Chinese exchanges have reached a point where they represent close to a majority of the overall Bitcoin's market share.  This has reached a point where it represents a threat to China's ability to control monetary policies for the Yuan and within its own borders.  Cryptocurrencies are borderless.  

We are likely to see governments stepping in to possibly introduce central bank digital currencies as one way to curb a Bitcoin take over.  There are other implications of course, such as limiting the black market, illegal activities, unregulated Casino's (I mean ICO's) ;) and such.  

I don't see China's regulatory response as being a threat.  

This is why I am becoming passionate about the better protocols and technology that Ripple is putting in place.  Bringing distributed ledger technologies that will forever change business models in the financial sector, a perfect bridge for China that traditionally has not been wired to foster such innovation.    There is room for co-existence.

I am really hopeful that in the long-term, central banks will start acting in concert because this will certainly help prevent the market from being subjected to such crypto monetary policies.  

 

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The more mainstream crypto gets, the more we might expect to see certain things happen in the upcoming years if the banking system / govt wants to put pressure on the crypto market:

1) More and more businesses will accept Bitcoin and other altcoins BUT:

The government will place larger taxes on income received from crypto currencies CAUSING businesses to be reluctant to accept altcoins.

2) Higher capital gains taxes on crypto currency vs real estate or stock/bond income

3) In an extreme case of the fiat dollar losing its utility and value to altcoins, there could be laws put in place making them illegal once widespread panic begins to ensue amongs big banks, and companies like JP morgan who are getting nonstop calls from their investors daily saying "why are our returns dropping so significantly, I want to place my money elsewhere"

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