Let's say, for the sake of argument that Ukraine legalizes BTC, while it's illegal everywhere else.
What you think will happen:
- Ukraine will make fat stacks from all the people who care about BTC. Crypto-libertarians will rejoice, issue fifty billion ICOs, and Ukraine's GDP will exceed that of the rest of the world. BTC will go to the moon, and anyone who didn't get on that train when its future was in doubt will be starving to death in a ditch, or working as an indebtured servant, soldering mining rigs for early adopters.
What will actually happen:
- Any Ukranian bank that touches BTC will be barred from doing business in USD. For a bank, this is as good as suicide.
- Any intermediary that exchanges BTC for a local currency (Hryvnia), without touching USD will be barred from transacting with any Ukranian banks, that don't want to be barred from doing business in USD.
- Anyone trying to use Hryvnia for any international transactions will be subject to strict AML scrutiny, because it is a well-known intermediary currency for laundering BTC. The burden of proof with AML is on you, not your accuser.
- The Ukranian Rada will quickly come to its senses, and, in order not piss in the cornflakes of the 99% of its citizenry that doesn't give a shit about BTC, will ban it, and stop being a pariah state in the world of international finance.
What a perfect example of a straw man argument you made! I just love when people tell me what they think I think!
No, hypothetical Ukraine will not issue fifty billion ICOs and its GDP will not exceed the rest of the world (btw it is rather ignorant to tie ICOs to bitcoin, they are completely different things).
What I think will happen in this hypothetical scenario, is that bitcoin will have a safe place in Ukraine where it can be legally turned in a very real cash USD, totally by an off-banking method. Then these USDs will be shipped to banks in Poland or Germany or Switzerland, which will accept it rather happily (as they usually do). Meanwhile, the rest of the world would continue using bitcoin for their day to day purposes, ignoring a worldwide ban. Some purposes will probably criminal [1], but many will have legal ones, especially in countries with failed fiat currency, like Venezuela or Zimbabwe. Because, you know, you can't really control a person who sells a pig to his neighbour and wants to have something REAL in return.
Should be mentioned, that if we pretend that just one country will legalize bitcoin, then it is more likely that this country will be the one least vulnerable to bank sanctions. Iran or North Korea are much more likely candidates than Ukraine.
Anyway, in reality, a worldwide ban is unlikely at this point, given the acceptance of bitcoin by too many jurisdictions already [2]. It's just a matter of time when it'll go to the moon and establish itself as the main world currency.
What you think will happen:
- Ukraine will make fat stacks from all the people who care about BTC. Crypto-libertarians will rejoice, issue fifty billion ICOs, and Ukraine's GDP will exceed that of the rest of the world. BTC will go to the moon, and anyone who didn't get on that train when its future was in doubt will be starving to death in a ditch, or working as an indebtured servant, soldering mining rigs for early adopters.
What will actually happen:
- Any Ukranian bank that touches BTC will be barred from doing business in USD. For a bank, this is as good as suicide.
- Any intermediary that exchanges BTC for a local currency (Hryvnia), without touching USD will be barred from transacting with any Ukranian banks, that don't want to be barred from doing business in USD.
- Anyone trying to use Hryvnia for any international transactions will be subject to strict AML scrutiny, because it is a well-known intermediary currency for laundering BTC. The burden of proof with AML is on you, not your accuser.
- The Ukranian Rada will quickly come to its senses, and, in order not piss in the cornflakes of the 99% of its citizenry that doesn't give a shit about BTC, will ban it, and stop being a pariah state in the world of international finance.