“Bitcoin Should Be Banned or Taxed”

The Minneapolis Federal Reserve Bank has suggested that if the government bans or taxes Bitcoin, it will run permanent budget deficits.

The Minneapolis Fed’s October 17 report suggested that Bitcoin would be problematic at a time when governments are trying to run permanent deficits using nominal debt. According to the report, governments should tax or ban assets like Bitcoin in order to sustain budget deficits.

“Bitcoin is a problem for governments”

The Minneapolis Fed claimed that Bitcoin has created a “balanced budget trap,” an alternative situation where governments are forced to balance their budgets.

The research report included the following statements;

“A potential ban on Bitcoin could create a unique application of permanent primary deficits. Bitcoin could also be taxed.”

The primary deficit occurs when governments spend more than they collect in taxes and other revenues. The term “permanent” used for the primary deficit means that the government plans to continue spending more than its revenue 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 outside of the COVID-19 period, is related to treasury costs. The news reported that interest costs on treasury debt increased by 29 percent to $1.13 trillion.

Matthew Sigel, head of digital asset research at VanEck, commented on the Minneapolis Fed’s rhetoric regarding Bitcoin. Sigel noted the following;

“The government dreams of a ‘legal ban’ and extra taxes on $BTC to ensure that its debt remains the ‘only risk-free security.’”
$ETH $BNB
#CryptoDeNostradame #ParrotBambooCrypto