The cryptocurrency sector faced one of its most significant security breaches this year as stablecoin banking platform @0xinfini fell victim to a sophisticated cyberattack.
The government could keep some amount of other currencies around for the purposes of things like tax refunds, and not liquidate all other currencies upon receipt. If you choose to denominate your return in Euros, you’d get your refund in Euros, and the tax authority would buy any additional Euros they need in order to process your return.
There’s no real requirement that everything be denominated in USD (or whatever your local currency is), that’s just a preference by your tax authority.
But my real point here is that whether your local tax authority accepts a given currency for payment has little to do with whether that other currency is “real.” USD are just as “real” as cryptocurrencies, they just differ in who accepts them and how money supply is managed.
It needs to be able to destroy the tax money after you pay it.
That’s just an accounting trick, they can “destroy” whatever the current USD value would be. Whether they hold or immediately exchange the BTC is largely irrelevant.
And governments don’t necessarily need to issue the currency they use. For example, Ecuador uses the USD as their national currency. There’s nothing stopping any country from standardizing on multiple currencies either.
The government could keep some amount of other currencies around for the purposes of things like tax refunds, and not liquidate all other currencies upon receipt. If you choose to denominate your return in Euros, you’d get your refund in Euros, and the tax authority would buy any additional Euros they need in order to process your return.
There’s no real requirement that everything be denominated in USD (or whatever your local currency is), that’s just a preference by your tax authority.
But my real point here is that whether your local tax authority accepts a given currency for payment has little to do with whether that other currency is “real.” USD are just as “real” as cryptocurrencies, they just differ in who accepts them and how money supply is managed.
It’s not just a preference. Taxation is what gives the currency value.
The government can create and destroy dollars. It spends dollars into existence, and it taxes them into nothingness.
But if it receives BTC, it can’t destroy the BTC. Same with any foreign currency.
It needs to be able to destroy the tax money after you pay it.
That’s just an accounting trick, they can “destroy” whatever the current USD value would be. Whether they hold or immediately exchange the BTC is largely irrelevant.
And governments don’t necessarily need to issue the currency they use. For example, Ecuador uses the USD as their national currency. There’s nothing stopping any country from standardizing on multiple currencies either.