"Bitcoin should be banned or taxed"

The Minneapolis Federal Reserve Bank claimed that the government would incur permanent budget deficits if it were to ban or tax Bitcoin.

In the Minneapolis Fed's report dated October 17, it was suggested that Bitcoin would cause problems in a period when the government is trying to incur permanent deficits by using nominal debt. According to the report, governments need to tax or ban assets like Bitcoin in order to sustain budget deficits.

"Bitcoin is a problem for governments"

The Minneapolis Fed claims that Bitcoin has revealed the 'balanced budget trap,' which is an alternative situation where the government is forced to balance its budget.

The research report includes the following statements;

**"A possible ban against Bitcoin could provide a unique application of permanent primary vulnerabilities. There could also be a tax on Bitcoin." **

The primary deficit arises when governments spend more than they collect from taxes and other revenues. The term “structural” used for the primary deficit implies that the government plans to continue spending more than its income indefinitely.

The total accumulated national debt of the United States has exceeded $35.7 trillion. On the other hand, the primary deficit, which is the annual difference between tax revenues, is around $1.8 trillion.

Reuters reported that this year's deficit, the largest deficit outside the COVID-19 era, was related to treasury costs. Interest costs on treasury debt increased by 29 percent to $1.13 trillion, the report said.

VanEck's digital asset research director Matthew Sigel commented on the Minneapolis Fed's remarks on Bitcoin. Sigel recorded the following;

“The government is dreaming of 'legal prohibitions' and imposing extra taxes on BTC to ensure that its debts remain as 'risk-free securities'.”

ECB consultant Jürgen Schaaf, on the other hand, took a stand against Bitcoin. Schaaf stated the following sentence;

‘There are compelling reasons to advocate for policies that will hinder and even eliminate the growth of Bitcoin.’

Statements suggesting that the US needs to take a stand against Bitcoin in order to continue printing money have attracted attention. On the other hand, US presidential candidate Donald Trump announced that if elected, he would make BTC a strategic reserve.

This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should conduct their own research when making decisions.