War on Bitcoins: US States Tighten Noose on Bitcoins

Increasingly desperate governments in fear of competition from their monopoly privilege over money have been in the process of tightening the noose on bitcoin, whose popularity has been gaining ground. 

From the Wall Street Journal:

State regulators are warning virtual-currency exchanges and other companies that deal with bitcoin that they could be closed down if their activities run afoul of state money-transmission laws, according to people familiar with the matter.

According to people familiar with the situation, banking regulators in California, New York and Virginia in recent weeks have issued letters telling the companies that they need to follow the state rules or prove that the rules don't apply to them.

The warnings fall short of formal "cease and desist" orders, which would demand that the companies immediately stop engaging in their business, these people said.

Bitcoins essentially promotes the blackmarket or the informal economy or economic activities outside the control of governments.

The growing popularity of digital cryptocurrencies led by bitcoin extrapolates to the intensifying growth of the informal economy. The informal economy in the US has reportedly doubled since 2009

And growing blackmarkets or informal economy reduces the capacity of governments to seize or confiscate resources from her ‘dissentious’ constituents directly via taxes and indirectly via financial repression and thus is seen as a threat to government’s monopoly on money

And as I have previously explained:

Bitcoins are supposedly decentralized. So technically speaking the US government cannot directly strike at bitcoin without taking on the internet itself. Thus the US government’s campaign against bitcoin has been channeled through the financing facilities of the trading platforms and not bitcoin itself…

The US government wants bitcoin dealers to operate under their umbrella and has assailed or harassed those operating outside their ambit.

In short, the governments will work on controlling cryptocurrencies covering all variants; aside from Bitcoin:Litecoin, PPcoin, Freicoin, Solidcoin, BBQcoin, Fairbrix, Geistgeld among the many more.

Under today’s highly fragile financial conditions which may anytime metastasize or implode into a global debt crisis, as seen via the unfolding upheavals in the bond markets, any possible challengers to the political establishment whether gold and precious metals, cryptocurrencies  or bizarrely even cash transactions, represents the grand scheme of slippery slope events designed to deepen political and economic repression to preserve the privileges of the beneficiaries of the industrial age political system. 

Resistance to change would only mean a disorderly transition.