How Can Governments Stop the Popularity of Cryptocurrency?

In the first half of 2025, the crypto market capitalization fell by a third, from $3.6 trillion to $2.4 trillion. Experts attribute this not only to a decline in consumer demand for cryptocurrencies, but also to possible actions by regulatory authorities. One of the reasons for the sharp decline in the market could have been government intervention.

Cryptocurrency is digital money that can’t be regulated by a single financial institution. It is designed for transactions without the involvement of intermediaries in the form of a government. Money is sent from one point in the world to another, bypassing third parties. However, regulatory authorities are not happy with this state of affairs.

You’d think that to get rid of bitcoin and altcoins, they must turn off the Internet, which provides the operation of the digital industry and make the competitors disappear. However, the countries will never take such a step. There are other practical measures that can have a negative impact on the popularity of cryptocurrencies and their further development.

Ban on mining

Most cryptocurrencies are built on mining. People who have powerful video cards and ASICs, receive some kind of reward for solving the blocks in the blockchain. A considerable number of transactions is processed with the help of this process. If mining disappears, the number of unconfirmed transactions will increase, the load on the network will grow, and each transfer will take several days. Then no one will want to use cryptocurrencies. Similar restrictions have already been introduced in China.

It is worth saying that the developers of cryptocurrencies are aware of this problem. Therefore, some of them think about the fastest transition from the algorithm Proof-of-Work to Proof-of-Stake, where the dominant role is given not to the miners but to simple users who have digital coins on their account.

Creation of the new laws

Financial regulatory authorities often compare cryptocurrency with an illegal means of payment, used to finance the criminal activity. Therefore, they intend to introduce the new rules that could prevent the interaction of bitcoin with the real world.

Last year, British authorities focused attention on the negative impact of crypto industry on the traditional economy. The heads of central banks are going to expand the legal and regulatory framework regarding crypto exchanges and instant exchange services, where many cases related to money laundering were noted.

Market speculation

At any moment, governments can buy BTC or other coins and then instantly sell them, causing cryptocurrency prices to plummet. As a result, traders will panic and start getting rid of their assets. Looking at the high volatility and risks, investors will refuse to invest in cryptocurrencies forever.

In addition, government agencies can significantly lower cryptocurrency prices by using negative news coverage. Today, the digital economy is highly susceptible to information from the internet and the media. If unfavourable reports appear everywhere, the price of bitcoin will immediately fall.

Should governments destroy digital finance today?

Traditional economy has gaps in its existing financial mechanism. Cryptocurrency successfully patches these gaps. In African countries, where 60 % of the population has no connection to banking institutions, the digital ecosystem is becoming an effective tool for paying for various services. Meanwhile, it doesn’t require confidence, as the transactions can’t be compromised, and the operations are completely transparent. As a result, using cryptocurrency, common people get access to the financial world.

Governments understand the advantages of the digital economy, so they are in no hurry to completely destroy the cryptocurrency industry. With a productive approach, cryptocurrencies will become the ideal means of payment and investment in the future. Experts believe that the digital ecosystem should circulate appropriate money that won’t have barriers when conducting financial transactions.