There is little doubt that electronic currency is an inevitable reality for all of us. It is also something governments will have to deal with. They can hide no longer. It is shocking that despite all of the movement and growth within the electronic currency movement, we have heard nary a whisper about this topic within the political discussions leading up to a major election year. I find this absence of discussion absolutely foolish and short-minded.

The tech community has naturally embraced the various Bitcoin, Litecoin, and Altcoin cryptocurrency standards. Each cryptocurrency that emerges is an attempt in some fashion to improve or replace a component of Bitcoin. It is a rapidly evolving landscape of alternatives and communities that is a wonder to behold. It is an ultimate expression of freedom that is enabled by the Internet, technology and the minds of free people.

Freedom worries those that hold power, and yet the cryptocurrency door has already opened far and wide with no turning back. Governments will have to deal with these cryptocurrencies in one fashion or another because there is a lot at stake for the stranglehold on your privacy and personal business. Make no mistake about it: Your money, your assets, where you spend it, when you sell things off — all of that is tracked in some way by your friendly Uncle Sam. The reasoning is simple: Among other things, governments need to tax, they need to provide services and they need to protect, so they are interested in what is going on with financial transactions. What governments do not like is anyone looking in on their business and how they spend it. And they do not like resistance or competition.

As many people know, a big attraction to this form of currency is the perception of anonymity that is built into it. It is notable that regardless of how truly anonymous any digital currency is, their very nature is at odds with the vast number of government organizations here and abroad. These governments are certainly interested in regulating and controlling the smallest things in our lives, and there is little doubt that its interests in digital currencies are going to be the same.

Will 2016 be the year that our own government acts on digital currencies? Is it even possible to regulate or will they have to accept the anonymity?

What it will look like

First, the “‘old guard,” such as bankers and investors, will do what they can to belittle and besmirch the digital currency movement, which is already happening. Undeterred on the mission, I believe there will be an attempt at some point to isolate cryptocurrencies to verified identities. The way that it is enforced will be put on merchants that accept cryptocurrencies. In other words, if you are in business and you accept these coins, there will be requirements to tie transactions to verifiable information. Perhaps that means these systems will require your email, a license or a credit card. Whatever it is, that information is then shareable with the government and the agencies can have their eyes peering right back into your business.

It is also possible that the government establishes its own system of cryptocurrency. I fear that the community or the public at large will be sold on the idea quickly without looking at what is going on behind the scenes. There will undoubtedly be collusion with agencies, banks, credit bureaus and other entities that Americans love so much. If you detected a bit of sarcasm there, then you’re on my level on this.

Such a system, or one that resembles what I just described, will not stop cryptocurrency. There will always be an underground. Digital currencies are a representation of freedom, and it needs to stay free of government control and excessive purview. I respect the digital currency community and wholeheartedly embrace it.

Image credit: BTC Keychain