What the Regime Will Do to Fight Private Digital Currencies

Source: Ludwig von Mises Institute
by Ryan McMaken

“[W]hen it comes to propping up the official currency, a regime or central bank has several tools. For one, the regime can continue to make a certain currency legal tender. Contrary to what many believe, this does not force people to use a certain currency for all transactions. Nevertheless, legal tender laws do impel users of money to favor one specific money over others for the repayment of loans and other uses. Moreover, a regime can mandate that tax bills be paid in the currency of the regime’s choosing. … Beyond legal tender laws, the regime could use the tax code to punish the use of private currencies in other ways. Charging capital gains taxes on alternative money is just one method. Regimes have been known to become quite creative when it comes to punitive taxes against activities the regime does not like.” (01/12/22)