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article imageOp-Ed: Bitcoin, a threat to the central banks, banned in Russia

By Justin King     Feb 9, 2014 in World
Moscow - The Russian government has announced that Bitcoin, a popular alternative currency, now is illegal in Russia. The prosecutor’s office pointed to its possible use in money laundering and financing terrorism as cause for the move.
The reality of the situation has little to do with money laundering or financing terrorism. The fact is that Bitcoin poses a substantial threat to central banks and national currencies across the globe. Bitcoin, and other alternate currencies, are not subject to the whims of central banks, such as the Federal Reserve, and have the ability to make national currencies obsolete. The manipulation of currency markets has long been a tool in the economic war that nations engage in every day.
The Russian Prosecutor General’s Office said that the rouble was the only acceptable currency in Russia after stating that
Systems for anonymous payments and cyber currencies that have gained considerable circulation - including the most well-known, Bitcoin - are money substitutes and cannot be used by individuals or legal entities.
The threat to the central banks of the world is apparent. Almost every nation in the world today employs a “fiat currency,” meaning that the currency holds value simply because people believe that it’s worth something. National currencies are rarely backed up by gold or silver, as they were at one time. National bank notes are simply fancy paper, carrying the intrinsic value of a used piece scrap paper. Bitcoin is also a fiat currency, backed up solely by the belief of users that it is worth something. The only difference between the two is that individual governments are firmly in control of the national currencies, while Bitcoin’s individual users determine its value.
Jeffery Tucker of the Foundation for Economic Education said
The important thing is that Bitcoin I believe has a potential of becoming a new international monetary standard, something like gold standard in the 19th century had this real potential. So, I think, it could displace the dollar, and we are talking about maybe five, ten or fifteen years from now, but the bottom line is that the government currencies are broken at the moment, they don’t meet the modern needs of an internet age and Bitcoin does,
Bitcoin transfers employ a heavy amount of cryptography, making the transactions anonymous. Tucker went on to say
it doesn’t really matter what the government say or don’t say about Bitcoin. It’s purely a product of global international market of traders and users.
Large banking institutions have not been entirely accepting of the people-backed currency. Russia’s central bank expressed its opposition to the currency just two weeks before the nation banned its use. The banking institution referred to the digital currency as highly speculative and said it carried a big risk of losing value. The rouble, the currency regulated by the institution, has steadily lost about 6.5% of its value per year.
he US Federal Reserve is seen in Washington on December 10  2013 file photo
he US Federal Reserve is seen in Washington on December 10, 2013 file photo
Karen Bleier, AFP/File
Large banking institutions are known to have been engaging in price-fixing, as the scandals last year demonstrated. These scandals showed how far the banking establishment is willing to go, employing mafia-style tactics, to further the divide between the “have’s” and the “have not’s.” An authoritative report in Rolling Stone opened with an apology to those who have been critical of the international banking cartels.
Conspiracy theorists of the world, believers in the hidden hands of the Rothschilds and the Masons and the Illuminati, we skeptics owe you an apology. You were right. The players may be a little different, but your basic premise is correct: The world is a rigged game. We found this out in recent months, when a series of related corruption stories spilled out of the financial sector, suggesting the world's largest banks may be fixing the prices of, well, just about everything.
A one-world currency has long been a fear of globalization critics, but that fear mainly originated with the belief that the currency would be controlled by the central banking apparatus. A currency that cut out the global bankers and relied entirely on the citizens of the world for value may be a major win for those that wish to remove the many layers of control exerted by the governments of the world.
Bitcoin has had its share of problems, and the internet is a fickle environment. So, the currency that finally takes hold may not carry the Bitcoin name, but a currency like it that is immune to whims of national governments would prove to be a more stable currency than any currently in use. It is in the interest of every person to support currencies that are borderless and not subject to the control of the state.
China has barred its financial institutions from using the currency, and Canada has stated that it is not legal tender.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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