The WSJ reports that Turkey has moved to ban Bitcoin payments as Turks lose confidence in the lira. This is a preview of what Bitcoin enthusiasts are likely to face over coming years. Countries with the least stable currencies will move first to ban Bitcoin, but developed countries are also likely to act. The bottom line on Bitcoin is that it is a threat to fiat currencies and therefore central banks and ultimately fiscal authorities running massive deficits.
Turkey will ban the use of cryptocurrencies as a form of payment following months of economic turbulence that spurred locals to swap the local currency for bitcoin and foreign currencies.
Turkey’s central bank said Friday that cryptocurrencies are excessively volatile and can be used for illegal activities. The bank also said crypto assets are “neither subject to any regulation and supervision mechanisms nor a central regulatory authority.”
Cryptocurrencies such as bitcoin, which are independent of central banks and created by so-called computer miners, are seen as a threat to government issued currencies. China keeps a tight leash on bitcoin trading. Nigerian officials said recently that the increasing use of bitcoin could erode the value of the local currency, the naira. Locals there have struggled to gain access to foreign currencies, turning to the black market or bitcoin, according to traders.