Banning cryptocurrencies will create a demand for the use of cryptocurrency like frame gold coin pendant designs within the black market, with users being willing to pay much more than what a government exchange is charging. This will likely lead to an increase in illicit activities using cryptocurrency. Unregulated privacy coins may continue to proliferate with these consequences: higher fees, greater volatility, greater returns for investors and increased crime rates. A predictable regulatory system can help protect against these problems if implemented correctly.
1. Cryptocurrencies will continue to exist.
Cryptocurrencies will continue to be used for illicit purposes if not banned by the government and individuals will exchange among themselves in order to avoid the government’s ban . Cryptocurrency trading is mostly done using personal computers, cellphones and tablets, which are designed to make the exchanges of cryptocurrencies easier, faster and more simple than a conventional bank or stock exchange. This is the main reason for a continuous increase in the value of cryptocurrencies since it first came into existence . The higher transaction fees, higher fees on laundering money from illegal activities and risks taken by the participants when using unregulated privacy coins can lead to a serious decline in the cryptocurrency market.
2. Cryptocurrencies will be used as money.
Users of cryptocurrencies will continue to use these coins for trading and payment transactions even if the government had banned it. In the 2016 research , it has been shown that 40 percent of bitcoin users are solely using cryptocurrency for purchasing goods and services, while 34 percent are using crypto as an investment only. This shows that banning cryptocurrency is not enough to stop its use, as users can just change their approach on how they use it.
3. Cryptocurrency exchanges will remain active in the black market and more organized crime is likely to participate in it.
Most people who use cryptocurrencies engage in buying and selling them through exchanges. Banning a cryptocurrency may not necessarily stop this kind of transaction, as these exchanges can simply shift their activities to the black market, where they continue their business without government regulation.
Some of these exchanges can go unregulated, hiding illicit activities using cryptocurrency and providing more anonymity for users than ever before. Since there are no central regulators or banks managing the money involved in cryptocurrencies, they can be easily laundered off without any trace , which will make it harder for it to be tracked by law enforcement agencies.
4. Illicit activities will just become more organized.
Cryptocurrency exchanges can use their funds for illicit activities such as drug trafficking and money laundering. For this reason, law enforcement agencies have warned that cryptocurrencies should be regulated by the government because of their high potential for illegal activities . Cryptocurrency transactions can be easily carried out without any government oversight and they can be used to make illegal transactions more efficiently than they were before it was banned.
5. More users will be attracted to publicly traded cryptocurrencies such as Bitcoin if it is made legal again.
In 2015 , the number of merchants accepting cryptocurrency rose from 5,000 to 100,000 merchants globally, which suggests that financial authorities are already acknowledging the growth of cryptocurrencies despite bans in some parts of the world. This shows that people still believe in the potential value of cryptocurrency even though it is being seen as a threat by some governments. If a government ban on cryptocurrency does not stop its use, it will only increase its acceptance by those who want to reap all the benefits from using it. On the other hand, if this ban is lifted , many users will be attracted to publicly traded cryptocurrencies such as Bitcoin because it is more accessible and regulated, which can lead to greater demand for publicly traded cryptocurrencies .
6. Financial authorities may lose control of the flow of money over their borders.
Governments will lose control of the flow of money over their borders if they do not regulate these virtual currencies and allow free trade among its citizens . Since there are no central banks or regulatory agencies monitoring the flow of money among citizens, it will be difficult to detect illegal activities using cryptocurrencies. This is due to the fact that transactions involving cryptocurrency can be anonymous and there is no way for financial authorities to restrict its use. It will be easier for money launderers to launder their money in a peer-to-peer manner, as well as for terrorists to fund their operations.
7. Cryptocurrency exchanges which help launder money will continue their illicit activities.
Laundering money through cryptocurrency is already being used by some exchanges and these exchanges continue their illicit activities even if a government has banned the use of cryptocurrencies. If cryptocurrencies are not banned completely, exchanges can use their unregulated privacy coins to facilitate money laundering. It is hard to trace these kinds of transactions and it can be easily laundered because of the anonymity provided by cryptocurrency.
Summary:
Cryptocurrency exchange platforms can still thrive despite government bans.
Cryptocurrencies can still be used for illicit activities if not regulated.
The flow of money among its citizens will be less regulated if banning cryptocurrency is not adopted by governments.
