The Netherlands, in contrast to El Salvador, must ban Bitcoin

Tomki91

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The Netherlands, in contrast to El Salvador, must ban Bitcoin

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The Netherlands wants to ban Bitcoin and cryptocurrencies. This is the words of Pieter Hasekamp, head of the central planning office, a Dutch office that carries out research and analysis on behalf of the government.

Hasekamp wrote in an essay entitled "The Netherlands Must Ban Bitcoin":

For both investors and governments, the last person to act is the loser. The Netherlands must now ban Bitcoin.

Hasekamp wrote in an essay entitled "The Netherlands Must Ban Bitcoin": For both investors and governments, the last person to act is the loser. The Netherlands must now ban Bitcoin. According to the director of the research office, the problem is that cryptocurrencies are volatile and often used for illegal purposes. Therefore, the production, trade and possession of them should be prohibited.

Furthermore, Hasekamp added that people think Bitcoin may soon replace traditional currencies. According to him, however, this will not happen. In the essay, the researcher paid special attention to Gresham's law. It is a monetary principle that says that an overvalued currency, or "bad money," tends to force a legally undervalued currency, or "good money," out of circulation. By calling Bitcoin "bad money," Hasekamp argued that Gresham's law could do the opposite for Bitcoin:

Cryptocurrencies exhibit all the features of 'bad money': unclear origin, uncertain valuation, suspicious trading practices. […] Has Gresham's law made a comeback? No, quite the contrary. Cryptocurrencies are not used in regular payment transactions. […] Bad money disappears from circulation because nobody wants to accept it anymore.

The head of the research department concluded that if the Netherlands banned BTC, its value would drop sharply.

Netherlands vs El Salvador
What is happening, or rather what can happen in the Netherlands, is in stark contrast to what is happening in El Salvador. This Latin American country has just legalized BTC as legal tender. Unlike a country shutting down in its belief that BTC is bad, another small country on the other side of the world will use it as a tool to boost its economy.

Both choices can have consequences and raise doubts. On the one hand, El Salvador legitimizes Bitcoin by making it the de facto national currency and therefore a foreign currency. In turn, this foreign currency may become illegal in the Netherlands.

In fact, the Netherlands is not the first country to try to ban Bitcoin. China is trying to implement similar plans. However, it seems that they are not effective after all. Typically, the peer-to-peer market begins to flourish after such restrictions are introduced. In order to try to introduce a real ban, you would have to ban cryptocurrency ownership, not just trading or mining.

India has also tried to demonize Bitcoin. Later, however, the Supreme Court ruled that such actions were unconstitutional.

In any case, the decentralized nature of Bitcoin makes it impossible to 100% control it. So a ban may not stop both owning and trading BTC.

BTC price does not seem to react to the news from the Netherlands. Bitcoin is now showing a modest 0.34% profit within 24 hours, and its price is around $ 37,000.
 

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