Decisions made by governments in the economic and <a href="https://www.forbes.com/sites/jayadkisson/2018/11/28/the-cryptocurrency-paradox-and-why-crypto-is-failing/">political</a> spheres often have unexpected effects. These are imponderables that emerge and may even change the predicted scenarios. This is what is currently happening with exchange controls, whose implementation, tending to establish centralized control, has served to give a higher boom to decentralized tools, such as bitcoin and cryptocurrencies.

In scenarios before bitcoin, the implementation of exchange control generated more or less predictable consequences, including the emergence of parallel markets where people come to buy and sell currencies. With this, citizens and institutions seek alternatives to acquire and accumulate well-valued currencies, mainly the dollar, to use them as a reserve of value. This has been the case historically until 2009, the year in which a new factor was born that now converges in this process. This new imponderable is called bitcoin.

The cryptocurrencies thus burst into the scenario of <a href="https://www.cryptoknowmics.com/crypto/crypto-exchanges-in-mexico-in-race-against-time-ahead-of-new-regulations/">exchange</a> controls, without any government having proposed it to them. The old measure, which is implemented with a centralizing intention, then becomes the perfect instrument that facilitates the growth of the new decentralized market of crypto coins. The use of crypto active, as well as resorting to parallel markets, is a decision of citizens beyond state control, with the added advantage that it is a technology with different characteristics and actors.

The fact, moreover, is paradoxical, bearing in mind that most governments try - with little success - to regulate and manage all aspects of the economy, including the emerging sector of cryptocurrencies. However, the evidence shows that the more one tries to control, the more tools citizens seek to evade restriction. In this context, crypto actives appear as one of the best investment alternatives.

A clear example of how governments, without realizing it, through these exchange controls have "served the table" for the advancement of bitcoin, is observed in countries like Venezuela, Argentina and even in faraway Zimbabwe, in Africa. The most recent case is that of Argentina, where the economic issue is now entering the public arena, starting with the new currency management regime established on September 2.

Government paradox: how exchange controls help bitcoin adoption

I am an industrial engineer specializing in blockchain. Enthusiast of cryptocurrencies and writing the latest news regarding the Crypto world.

Government paradox: how exchange controls help bitcoin adoption

Top Picks