• Regulatory Overreach: We are seeing politicians such as Elizabeth Warren publicly go against Bitcoin, and even if her proposed digital asset AML act has no real chance of passing, it does foreshadow that there are future battles coming on this.
• War on Cash: Many countries are taking high-denomination cash notes out of circulation, or banning physical cash transactions above a threshold.
• CBDCs: Many countries are talking about central bank digital currency (CBDC) trials, but my speculation is that most will not have the technical and overall economic capability to stand up a fully-functioning CBDC in 2023.
As we move into 2023, the landscape for Bitcoin has changed drastically since its inception. The Financial Action Task Force’s (FATF) Travel Rule is increasingly forcing exchanges and bitcoin service providers to document and share ever-more information about customer transactions, creating a potential for regulatory overreach. On the other hand, the war on cash continues as many countries take high-denomination cash notes out of circulation or ban physical cash transactions above a threshold. Politicians such as Elizabeth Warren have publicly gone against Bitcoin and proposed a digital asset AML act, though it likely has no real chance of passing. This foreshadows future battles ahead, but also shows that governments may eventually adopt Bitcoin as legal tender, hold Bitcoin in reserves, provide Bitcoin services for citizens, and encourage Bitcoin investors and entrepreneurs.
Additionally, many countries are talking about central bank digital currency (CBDC) trials, though it is highly unlikely that any will have the technical and overall economic capability to stand up a fully-functioning CBDC by 2023. Instead, the year will likely be focused on trials and rhetoric in preparation for future rollouts. Governments can especially force citizens into CBDCs in countries with large welfare states, with the understanding being, “If you want your welfare check, you’ll take it as a CBDC.”
As we look to the year ahead, it is clear that Bitcoin will be facing many changes and potential challenges. However, with the right preparation and understanding, it is possible to make the most of the situation and come out ahead.