A Bank of America cryptocurrency report warns of this risks and market that is possible from anti-privacy federal government measures.
Cryptocurrencies “challenge the ability of governments to levy taxes also to control capital flows more broadly,” according to a report that is recent Bank of America Securities obtained by CoinDesk. Doubt over how the U.S. governments will act to limit these use cases presents an danger that is key cryptocurrency investors.
“Encrypted private wallets with electronic assets that may be transmitted across boundaries would appear to undermine
The sovereignty that is monetary of nation-state,” the report claims.
In an case that is“extreme” regulators could just ban all institutions and intermediaries from transacting with cryptocurrencies. Or the us government could increase consumer information reporting and access needs for cryptocurrency exchanges, which the report describes being a more possibility that is plausible.
Additionally, support for main bank currencies that are digitalCBDCs) aren’t “just a type of payments competition,” the report states. “They may also be an attempt to replace private assets which are digital publicly-controlled people.”
Exactly how effective state-run counter-privacy measures is is a concern that is separate. The authors acknowledge that no matter how burdensome, anti-privacy changes being regulatory instead be meaningless”. Users devoted to deal privacy “could potentially produce a 2nd private’ that is‘truly to which they send money from their now-public wallet, and continue steadily to make anonymous cross-border transactions.” “At some limit, banning private assets being digital become too politically risky, too disruptive to constituents,” the report states. But carefully targeted regulations designed to restrict privacy could impose an encumbrance that is“serious on users.
Bank of America’s analysts stated they have been closely watching the potential risks and expected responses by the US government to restrict cryptocurrency that is personal. And given “uncertainty about how cryptocurrency areas would respond to a reduced-privacy environment,” the report suggests investors should “approach electronic assets cautiously.”