Just as the U.S. government once banned gold, there’s a good probability it will outlaw Bitcoin — as India is widely expected to do — if the No. 1 cryptocurrency becomes too successful, according to Ray Dalio, the billionaire founder of the world’s No 1 hedge fund, Bridgewater Associates.
The history of money suggests that U.S. policymakers could ban alternative currencies that challenge the dominance of the dollar, Dalio said during an interview on Yahoo Finance.
Bitcoin has proven itself over the last 10 years, Dalio said. It hasn’t been hacked. It has worked on an operational basis. It has built a significant following and it is an alternative, in a sense — “a storehold of wealth, like digital cash,” he said.
In a brief history lesson, Dalio said, “Bank of England … decided that it was in their interest to have a monopoly on banking … And so, what we did is every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing because things can get out of control.”
A proposed bill in India, if passed, will ban trading, mining, and even holding cryptocurrencies, Reuters reported. There’s widespread speculation that the government plans to outlaw all private virtual currencies and launch its own official digital currency.
Dalio referred to the Gold Reserve Act of 1934, signed by President Franklin D. Roosevelt, which transferred ownership of all monetary gold in the U.S. to the U.S. Treasury and prohibited the Treasury and financial institutions from redeeming dollars for gold. The program began in 1933 by first restricting the private use of gold during the Great Depression. It also established the exchange stabilization fund as a reserve to stabilize the U.S. dollar after the government abandoned the gold standard, Marketwatch reported.
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“I think that it would be very likely that you will have (Bitcoin) under a certain set of circumstances, outlawed the way gold was outlawed,” Dalio said. “My understanding from people who are … in government surveillance .. is, yes … they can track it, they can know who’s dealing with it. I would suspect it would be very hard to hold up against that kind of action.”
Bridgewater manages $140 billion in assets. Dalio’s net worth is $20.3 billion, according to Forbes.
Bitcoin was trading at $53,723.70 as of this writing, down from its all-time high of $61,556.59, according to Coindesk.
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