Are fiat currencies doomed?

We should keep in mind that governments have the power to destroy any competition for their national currency.

The modern monetary system simply cannot operate if they allow alternatives to fiat currencies to become a means of exchange. Governments have the power to use taxation as a tool to destroy competition. Reserve Banks own a monopoly on the issuance of currency. They need these monopoly powers to enable them to save the banking system from a catastrophic collapse.

They use a combination of inflation, which is a form of taxation, and normal taxes, to tax away the benefits of holding cryptos. They classify cryptos as an asset, commodity, or investment, and not as a currency, to enable themselves to kneecap their competition through taxation.

The government has to power to devalue the national currency, thereby pushing up the price of assets in terms of that currency, and then use the capital gains tax to tax away the value of that nominal increase. The investor is on the line for capital gains tax even though he did not make any real capital gains. The government has the power to generate taxes out of nothing. In essence, it is a form of expropriation without compensation. Pure communism, in other words.

Related post