The legitimacy that cryptos have gained may have been an unintended consequence of quantitative easing.
Governments and central banks played an important role in popularising cryptocurrency. The Fed decided to launch a second round of quantitative easing in 2010 in order to lower long-term interest rates.
Last week, finance minister Nirmala Sitharaman said in a written response to a Lok Sabha question: “The Reserve Bank of India (RBI) believes that cryptocurrencies should be prohibited.””
“Cryptocurrencies are by definition borderless, and international collaboration is required to prevent regulatory arbitrage,” she added. As a result, any legislation for regulation or prohibition can only be effective with significant international collaboration.”
The RBI is not the first central bank to have reservations about cryptos, nor is the Indian government. Both the Chinese and Russian governments have cracked down on cryptocurrency. So, what is it about crypto that makes many central banks and governments dislike it? In this article, we will attempt to comprehend this.
But first, we must understand how governments and central banks played a significant role in popularising cryptocurrency.