Governments Will be Judged for Harsh Response to Crypto, Warns Tim Draper

 In Governments and Regulations

Billionaire venture capitalist claims regulators’ rigid position on cryptocurrencies is unanticipated and will be judged unfavorably years from now.

The transition from fiat to cryptocurrencies is inevitable, and governments adopting a hostile stance towards crypto will be judged in the future for their harsh reactions to these changes, according to pro-Bitcoin venture capitalist Tim Draper.

In an interview with Forbes, Draper (a long-time proponent of cryptocurrencies) admitted that he “did not anticipate that the regulators would put a dark cloud over all this innovation”.

Cryptocurrencies, owing to the numerous challenges they pose (among these anonymity, lack of regulation and legal frameworks for consumer protection, extreme volatility, and susceptibility to usage for illicit activities such as money laundering and tax evasion) have put governments and regulators worldwide on high alert, with countries such as the United States, India and China moving to implement restrictions, strict checks, and even outright bans, although there are, as yet, little to no clear-cut regulations for the industry.

“I had hoped that there would be some clear, simple rules and we could then get on with it”, Draper said. “But I guess there are a lot of old-school banking lobbyists trying to cling to the status quo. Years from now, governments will be judged by how well they manage this transition from fiat to crypto.”

Earlier this year, Draper also warned the government of India that it was “stifling innovation” and making “a huge mistake” by adopting an anti-crypto stance.

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Draper (who bought 40,000 Bitcoins for $24,000,000 during a post-Silk Road auction, which are now worth around $267,662,000) also claimed that the new cryptocurrencies entering the market are something of a mixed bag. According to him, some are mere “Bitcoin copies” while others are likely to “have profound effects on industry and government”.

The venture capitalist also pinpointed the problem with blockchain technology today, claiming it “needs time to mature and for all that creativity to come to fruition”. Once it has developed to a certain stage, geographic borders will “dissolve”; then, using crypto as payment and utilizing smart contracts will all become possible.

Owing to increased regulatory scrutiny and a string of discouraging developments, the crypto market is currently caught in a prolonged downturn – however, this has done little to deter Draper’s optimism. Regarding the future of Bitcoin, the crypto permabull maintained that he was still standing by his prediction (made five months ago) that Bitcoin will reach $250,000 by 2022 – a stance he reiterated last week during an interview with TheStreet.

“… my prediction is that the price of one Bitcoin will rise to $250,000 in 2022. I think the products around Bitcoin, blockchain and smart contracts will make it much easier to do business via crypto — so there will be a major shift over these next four years”, Draper told Forbes.

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