Bright Future Ahead for Bitcoin in 2023: Regulations, CBDCs, and the War on Cash
-Regulatory Overreach: The Financial Action Task Force’s (FATF) Travel Rule is forcing exchanges and bitcoin service providers to document and share ever-more information about customer transactions, and politicians such as Elizabeth Warren have publicly gone against Bitcoin.
-CBDCs and the War on Cash: Many countries are taking high-denomination cash notes out of circulation, or banning physical cash transactions above a threshold. There are many countries talking about central bank digital currency (CBDC) trials, but most will not have the technical and overall economic capability to stand up a fully-functioning CBDC in 2023.
-The Future of Bitcoin: Bitcoin will be embraced by many countries as legal tender, held in reserves, provided to citizens as services and encouraged to investors and entrepreneurs. Ultimately, CBDCs may be forced onto citizens in welfare states.
As the year 2022 draws to a close, it is time to look ahead and consider what the future holds for Bitcoin. One of the major themes that will be prevalent in 2023 is that of regulatory overreach. The Financial Action Task Force (FATF) is pushing for more stringent regulations on exchanges and bitcoin service providers, requiring them to document and share more information about customer transactions. This has been met with some resistance from prominent figures such as Elizabeth Warren, who has gone on record to express her opposition to Bitcoin. However, it is important to recognize that the same was true for voice over internet protocol (VoIP) technologies such as Skype, which have since become widely adopted and accepted. This could very well be the case with Bitcoin in the future, as more and more countries are embracing it as legal tender, holding it in reserves, providing it as a service to their citizens and encouraging investments and entrepreneurship.
The war on cash continues, with many countries taking high-denomination cash notes out of circulation or banning physical cash transactions above a certain threshold. We can expect to see more central bank digital currencies (CBDCs) being trialled in 2023, though it is likely that most will not be able to implement a fully-functioning CBDC in this timeframe. Nonetheless, the trials and rhetoric that we will observe in 2023 will serve as a precursor to future CBDC rollouts. Furthermore, governments may be able to force citizens into using CBDCs in countries with large welfare states, such as providing welfare payments in the form of a CBDC.
All in all, 2023 looks to be an interesting year for Bitcoin. We will witness the effects of increased government regulations, the war on cash and the emergence of CBDCs, as well as the continuing adoption of Bitcoin as a legitimate form of currency. It remains to be seen how these trends will ultimately shape the future of Bitcoin, but one thing is for certain: the future looks bright for this revolutionary technology.
