Bitcoin could be ‘outlawed’ in US, says founder of world’s largest hedge fund
Cryptocurrency ban would be ‘impossible to enforce’, experts note
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The founder of the world’s largest hedge fund has warned that bitcoin could be “outlawed” in the US, despite experts warning that its decentralised network makes a ban virtually impossible to implement.
Bridgewater Associates CEO Ray Dalio said the cryptocurrency could go the same way as gold in the 20th century, when the Gold Reserves Act of 1934 effectively banned Americans from holding the precious metal or using it as money.
“Every country treasures its monopoly on controlling the supply and demand,” he told Yahoo Finance.
“They don’t want other moneys to be operating or competing, because things can get out of control. So I think that it would be very likely that you will have it under a certain set of circumstances outlawed the way gold was outlawed.”
Mr Dalio’s comments come amid proposals in India to introduce a law that would ban people from buying, holding, trading or mining cryptocurrencies.
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The purpose of the law would be to protect India’s monetary sovereignty and allow it to develop its own official digital currency issued by the Reserve Bank of India, however critics noted that any such ban would be largely unenforceable.
Bitcoin’s semi-anonymous, peer-to-peer design means investors could continue to hold and transfer the cryptocurrency, as well as spend it online internationally.
“If the government bans cryptocurrency, it will be impossible to enforce because it does not have the infrastructure to execute the ban,” Sidharth Sogani, CEO of cryptocurrency research firm Crebaco Global, told India’s Economic Times.
“This will give rise to a parallel shadow economy and this is a fallout the government would not want.”
Mr Dalio acknowledged the challenges facing Indian lawmakers, while also demonstrating his own limited understanding in the technicalities of cryptocurrency.
Bitcoin transactions and holdings can be publicly viewed on its blockchain – an online ledger that records every transaction. However, these transactions are not attributable to individuals.
“Now, can they do it? Now we get into the particulars,” Mr Dalio said.
“My understanding from people who are sort of in government surveillance is yes, they can understand they can track it. They can know who’s dealing with it. I don’t know, like, I’m not an expert on that.
“But, you know, there’s a whole way, is it private wallets? Is it not private wallets? How do you do this, this, and the other thing? I would suspect it would be very hard to hold up against that kind of action.”
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