Legal and geopolitical speculations regarding Bitcoin

Let's look at what governments are already doing or planning: Japan has already declared Bitcoin to be legal currency by law. Australia will follow on July 1st. Why is a currency which is allegedly so anti government being supported by these two governments? This short article is an attempt to understand attitudes of governments and possible implications for Bitcoin.

Could it be that Japan is trying to devaluate the yen by legalizing btc for retailers? Indeed Japan is struggling with deflation since the early nineties. Therefore "Quantitative easing" was in fact practiced in Japan much longer than elsewhere, with limited success. What is commonly considered to be the worst nightmare for central banks in general might actually be seen as a hope from Japan's point of view. The expected gains in Bitcoin value due to it's deflationary nature might push Bitcoin profiteers to diversify their profits into retail, as they already do with altcoins.
Another motive might be geopolitical, although this is very speculative: As much as Bitcoin might help Japan in fighting deflation, it hampers China's attempts to fight capital flight. Indeed, China lately started to impose very harsh KYC/AML regulations. Japan on the other hand doesn't suffer from capital flight, which is another reason for their chronic deflation.

Also Russia seems not too amused about the rise of Bitcoin as it initially considered to ban it. Yet their latest announcement indicates that Russia plans to legalize Bitcoin. However, all it's transactions should be monitored. For achieving this goal it might possibly be sufficient to prohibit anonymous internet access, because Bitcoin itself isn't anonymous. Capital flight is a concern for Russia as well.

The dire situation of Venezuela has made Bitcoin a safe heaven already, improving the situation of those who own Bitcoin at the expense of those who don't. In past similar situations like in Argentina for example, it usually was the US dollar who played this role. Coincidentally, Venezuela is a smaller nation with a wealth of oil reserves. It also happens to be associated with the BRICS nations.

Since China and Russia are known to be the major gold buyers it is not surprising that their attitude towards precious metals is way more liberal than towards Bitcoin. South Africa, another gold-aligned BRICS member, is also a major gold producer. At least Russia and China are betting on Gold and Silver, not Bitcoin.

Australia's mild attitude toward Bitcoin might have similar motives as in Japan's case, except the fight against deflation. I'm also inclined to assume that the possibility of mass surveillance of the Bitcoin block chain might seem attractive to some of Australia's officials.

So is BTC becoming a financial weapon of the West against the BRICS nations and precious metals?
Although it's possible, there is counter evidence: the EU has issued rather negative plans for Bitcoin. This can be easily explained by the fragile situation within the EURO zone. Flight into Bitcoin was evident already during the crises in Greece and Cyprus. Imagine what could happen in the next EURO crisis. No concrete measures have been implemented by the EU though. Also it is unlikely that Bitcoin can become an economic stimulus like in Japan, because Europe's middle class is too small compared to Japan's.

The attitude of the US towards Bitcoin seems ambiguous. Crypto currencies are rivaling the role of the US dollar in black markets. On the other hand, major US letter soup organizations are silent dominators of the internet.

Disclaimer: The information in this article is partially speculative and may be wrong. The readers are welcome to discuss the article.