Scandal has always been a good excuse for new laws, regulations, and other restrictions on liberty. From Tyler Durden at zerohedge.com:
Central bankers and international corporate financiers have long been pretending to hate the very concept of cryptocurrencies like Bitcoin and Etherium while at the same time investing heavily in blockchain technologies and infrastructure. The purpose of the ruse is not clear, but more than likely it was an attempt at mass reverse psychology – “We don’t like crypto and digital currencies because we supposedly have no control over them; free market proponents should embrace them blindly because that is how you will beat us.”
In the meantime, while major banking firms are investing billions into various blockchain products, central banks and global institutions like the BIS and IMF have been developing their own systems. In fact, the BIS notes with enthusiasm that around 90% of central banks around the world are already in the process of adopting CBDCs.
But why would anyone want to use government and establishment bank controlled cryptocurrencies when they have access to Bitcoin and dozens of other coins that are supposedly independent? Why trade freedom for more centralization?
First, existing cryptocurrencies are not as free as many people believe, with ample government tracking of blockchain transactions in place for years, the notion of the completely anonymous crypto user is a bit of a fantasy, and the idea that a product such as Bitcoin is going to “bring down” the central banks is becoming less realistic by the year.
Second, the crypto market is highly unstable in part because it is still very limited. While crypto use in America is higher than most other countries with around 12% of people using it as an investment (not as a currency), the rest of the world is mostly uninterested with an estimated global footprint of around 4%. Of that 4% only a handful of people actually own the majority of the market; these people are known as “whales” and they have the ability to tip the market up or down with little effort.
This happens in many other trade commodities and paper currencies also. The point is, crypto is not immune to manipulation.