There is a strong reason behind the recent wave of Bitcoin adoption among the world’s least stable and poorest countries. Bitcoin disproportionately benefits from the vulnerability of banks and the disadvantaged because it gives them access to an open global monetary network with predictable policy and low barriers to entry. Although the United States has attracted a great deal of interest and investment in bitcoin since its inception, it is safe to say that the average American knows very little about what the mainstream media headlines and Foodsters are saying.
While this goes against the usual convergence in the United States of technological advancement, it makes sense. As the home of the world’s reserve currency, the United States is uniquely positioned to provide broad access to basic financial services and a stable infrastructure to its components, who rarely see the need to move money outside this ecosystem. Thus, the average American feels no pressure to bypass the pseudo-decentralized platforms and the old bank they have been using all their life. Most Americans have not seen such frequent defaults as those in Argentina. Most Americans don’t encounter the high fees and dangerous conditions associated with sending transfers through legacy international money transfer services like Western Union. Most Americans have not experienced the desperation accompanying a currency collapse like those of Zimbabwe or Venezuela. And most Americans don’t know what it feels like to watch a coin they regularly use magically materialize, only to be given to citizens of a country that isn’t their own. It stands to reason that the American media and unsuspecting Americans see bitcoin as nothing more than a speculative investment. They simply do not understand the deeper purpose of this because the US financial system has not given them a reason to do so.
This may be about to change soon. If the effects of unprecedented stimulus and spending, negative real returns, increased inflation, increased institutional distrust, and frighteningly soaring traditional asset prices aren’t enough, the recently proposed $3.5 trillion budget adjustment bill may give Americans reason to consider alternative financial habits—not For reasons you might think of. Although the budget reconciliation bill is unusual in scale and scope, it also proposes unprecedented tax compliance measures that would dramatically change the financial landscape of many Americans. As currently written, the bill introduces requirements for banks and other financial parties to report to the Internal Revenue Service for inflows and outflows on all accounts of $600 or more, or with at least $600 of annual transactions. While these measures are ostensibly intended to reduce tax evasion by wealthy individuals, they will almost certainly have second- and third-order effects on those who are not as fortunate, most notably small businesses and ordinary individuals.
Although many Americans currently have reliable and accessible banking services, the proposed methods for enforcing tax compliance will have significant impacts on banks’ ability to do their job efficiently, threatening their ability to provide cost-effective products and services to those who struggle with hard to reach. He is. There is no doubt that the intense reporting requirements will introduce huge amounts of additional red tape for an already overburdened banking sector. Banks and institutions will have to charge consumers higher operating costs, making it more difficult to access essential financial services in the future.
More important, however, is the fact that approval would give the IRS the authority to collect information on every US bank account worth less than $600. Many Americans probably aren’t too keen on having banks report their account statements for examination by the IRS. While this intrusion into the financial privacy of US citizens is ethically questionable, it also poses an enormous security risk to the average American. Large organizations are not well known for keeping data safe from malicious cyber actors. Even those with the best tech talent in the world have trouble keeping data secure. To what extent can we expect the public sector to be safer? There are too many examples of government abuse to cite, but let’s not forget the 2015 incident in which 700,000 IRS accounts were hacked.
Regardless of what is ultimately included in the 2021 Budget Compromise Bill, the mere presence of popular political support for such intrusive levels of fiscal control and irresponsible fiscal policy illustrates how desperate we have become to perpetuate a system that appears to have reached its breaking point. . If the United States continues to embrace the elements of MMT – excessive spending, endless stimulus, higher taxes – it will continue to reduce taxable activity, along with its chances of raising the revenue needed to support the policies that largely introduced these issues in the first place. place. Add to that the possibility of extensive financial surveillance, and American citizens will find themselves in a dilemma. Their incentives to find a better way will match those around the world who live in similar situations. As many around the world have already discovered, bitcoin is an escape valve in a system that is beginning to show some cracks. Adoption is just the beginning.
This is a guest post by Drew Bornstein. The opinions expressed are their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
