Governments Keep Unintentionally Pushing People into Crypto
As people’s locked-away savings came under theoretical threat in Italy and citizens are increasingly worried about spying on them in China, the countries around the world are once again unintentionally pushing people into the arms of crypto. (Updated on 17:18 UTC: three first paragraphs have been updated to reflect the latest developments, a new paragraph has been added – in bold.)
Source: A video screenshot, Youtube/CBS News
Italian newspapers reported on Wednesday that Deputy Prime Minister Matteo Salvini voiced an idea of “an amnesty” for citizens holding hundreds of billions undeclared euros in bank deposit boxes, if they pay 15% tax. Later Salvini clarified that the government won’t introduce any tax on wealth and they “won’t touch Italians’ bank savings,” Reuters reported.
However, for the cryptoverse, it was enough to hear the deposit box tax idea to show this as another possible argument for people to get into cryptocurrencies that offers more privacy and control over your funds.
Italy's Deputy Prime Minister has proposed a plan to "tax" money and valuables held by citizens in their private safety deposit boxes.
— Pomp 🌪 (@APompliano) June 12, 2019
Don't be surprised if more people around the world start looking for a non-censorable, non-seizable asset to store their wealth in. 🔥
Moreover, Italy’s governing coalition is talking of issuing low-denomination, non-interest-bearing treasury bills (so-called mini-BOTs) — to circulate alongside euros, Rebecca Spang, historian of money, the author of ‘Stuff and Money in the Time of the French Revolution’, wrote in the Financial Times yesterday.
She later elaborated on Twitter:
If #MiniBots are introduced, they will be circulate as a quasi-currency in parallel w euros. The anti-EU League Party is making vague #MMT anti #Austerity noises, but DO NOT BE FOOLED. A "parallel" voluntary money will not be good for ordinary people 3/x
— Rebecca Spang (@RebeccaSpang) June 12, 2019
“Imagine if the state of Texas were in such dire straits that its best plan is an ICO with massive premine, to then repay its debtors not with USD but simply with tokens. That’s how big this is,” reacted Tuur Demeester, founder of Adamant Capital, a Bitcoin alpha hedge fund.
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Meanwhile, some Italian economists, quoted by local media, believe that mini-BOTs can become a real currency, reflecting the will of many Italian politicians and citizens to leave the euro zone.
Paper trails
Meanwhile, about 9,000km away, in Hong Kong, discussions over cash and paper trails is being led as lines in front of train ticket machines are getting longer than ten meters. Reporter at news outlet Quartz, Mary Hui, tweeted about people who are worried about their privacy and about leaving a paper trail that would tell the government that they’ve been at the current massive protests amid anger at a new bill to allow extradition to mainland China. People are not recharging their tickets, but choosing to use cash to buy tickets instead. It is well known that the government can use data from cashless, prepaid Octopus cards to track down suspects, Hui explains.
Octopus cards are normally kept for a very long time (I have one which I setup in 2007). It contains your entire chain of transactions viewable by govt and have been frequently used to implicate and prosecute.
— 朱溯 🐂 (@zhusu) June 12, 2019
“This raises a lot of interesting questions about cash vs. cashless societies, and how in times of protest people may drastically adjust their usual economic behavior”, tweets Hui. And while Octopus Card doesn’t necessarily need to be linked to a credit card, students often provide ID as a proof of their status to get the student version of the card, as commenters have pointed out.
And tracking data on metro/transit cards is not just done in Hong Kong or China. Way back in 2001, US authorities used MetroCard data to trace, arrest, and indict a murder suspect. https://t.co/hJ3oACoz1B pic.twitter.com/RaZnZfhRyB
— Mary Hui (@maryhui) June 13, 2019
Alex Gladstein, Chief Strategy Officer at Human Rights Foundation, tweeted about this, saying: “You can’t really [buy a train ticket with bitcoin] now. But the hope is that we can buy train tickets with Lightning-based apps in one or two years, preserving our privacy and making mass surveillance more difficult.”
The issue is further exacerbated by the news that the cyber-attack on the encrypted messaging service Telegram, which people used to evade surveillance and organize the demonstrations, reportedly originated from China – an act which the company’s CEO Pavel Durov linked to the protests.
IP addresses coming mostly from China. Historically, all state actor-sized DDoS (200-400 Gb/s of junk) we experienced coincided in time with protests in Hong Kong (coordinated on @telegram). This case was not an exception.
— Pavel Durov (@durov) June 12, 2019
Also, even some of the crypto groups on Telegram claimed that they “have received our first Chinese state sponsored spam attack.”
However, it’s not the first time governments and international institutions are making a case for crypto. For example, after the European Central Bank (ECB) was unwittingly boosting the case for cryptocurrency adoption in March by saying they could always create money, in April the International Monetary Fund (IMF) did the same when cryptoworld (re)discovered a February blog post speaking of a possible implementation of a policy which effectively taxes bank deposits instead of letting them accumulate interest.
