Other countries could model China’s recent move to make crypto transactions illegal, writes CNBC contributor Ron Insana.
I’ve noted in past commentaries that sovereign nations have the power to regulate and eliminate any competitor to their own currencies. One country took that step on Friday. China’s central bank has just made all cryptocurrency-related activities illegal. The value of bitcoin plunged over 5%, while other digital coins are also trading lower on the day. What China did may well be repeated in other countries. Regulators in the U.S. have already expressed some notable disdain for replacing the U.S. dollar, the reserve currency of the world, with any crypto except for a central bank digital currency. In other words, the only way to replace the dollar is to create a digital version of it, with the support of the Federal Reserve, the U.S. Treasury and Congress. Securities and Exchange Commission Chairman Gary Gensler who, himself taught a class on cryptocurrencies at MIT, has suggested that decentralized finance and the world in which bitcoin and other cryptos reside, has no rightful place in the U.S. financial system without meaningful oversight and additional regulations.
