Our observations and notes
Ray Dalio is a little out of date when he said China and India are getting rid of Bitcoin. China, yes but India is considering regulating it. Here is the link to an article that says a lawmaker in India had said India's cryptocurrency legislation will be distinct and unique.
For governments to ban in concert anything worldwide a majority of governments will have to have consensus view on the matter. It was easy to achieve a consensus on money laundering and terrorist financing because all money laundering and terrorist financing are in themselves criminal activities and therefore governments can easily agree on a course of action to control them. However, not all dealings in cryptocurrencies are criminal activities and it would be hard for governments to come to a consensus on such a matter.
Cryptocurrencies wield enormous opportunities for the individual, corporations and governments. Given the disparity in the economic status of governments around the world and given the intense competition among the governments to succeed at the cost of another, the governments that are disadvantaged economically would want to capitalize on this rare once-in-a-lifetime opportunity. They would not easily let go of such an opportunity.
Another factor is decentralization. We suspect those advocating banning cryptocurrencies do not understand decentralization well. Governments cannot ban decentralization per se as it brings opportunities in other fields outside cryptocurrencies too. They can ban blockchains offering cryptocurrencies only but not others. In fact they may even allow certain cryptocurrencies that run on permissioned blockchains but block permissionless blockchains only to have a control over the people behind crypto governance. Whichever course of action they take, people will simply shift to dark net for dealing in cryptocurrencies creating additional headache for the governments. Banning anything (think cigarette, liquor etc.) has proven to be counterproductive compared to regulating them.
Finally, politicians are there because people put them there. End of the day, the people decide what is good for them and not politicians. At least this is so in developed economies. Thus politicians have to be mindful of the pulse of the people. If cryptocurrencies become extremely popular governments would have be extremely careful before going against the pulse of the people. If they don't they may find themselves sitting on the opposition bench after the next election.
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