The Federal Reserve Bank of Minneapolis has released a report proposing radical measures to limit Bitcoin's influence on the US economy.

Minneapolis Fed Recommendations

The Federal Reserve Bank of Minneapolis report recommends taxing or entirely banning Bitcoin as measures to restore the ability to manage the US national debt. In the context of a record national debt of $35.7 trillion and an annual primary deficit of $1.8 trillion, such measures could help maintain long-term fiscal deficits.

Issues with Decentralized Currencies

Bitcoin's decentralized structure hinders governments from using traditional methods of financial control. This limits the ability of states to regulate their fiscal operations, which becomes an important issue for economies reliant on deficit financing.

Reactions and Consequences

The Minneapolis Fed's recommendations have sparked significant discontent in the crypto community. Matthew Sigel from VanEck described it as part of a 'coordinated attack' on Bitcoin. This raises further questions about balancing traditional finance and decentralized solutions.

The Minneapolis Fed's report highlights the increasing tension between state financial institutions and the growing world of decentralized currencies. It remains unclear how far governments may go to control Bitcoin.