CMV: I think that sooner or later the government itself will abuse—and even torture—people to force them to hand over their crypto keys.

Cryptocurrencies function in a manner similar to traditional forms of money but operate independently of institutional entities such as governmental bodies or banking institutions, which normally engage in facilitating transactions or verifying the reliability of the currency.

The use of cryptocurrencies has been expanding globally, driven by factors such as economic instability, limited access to the traditional banking system, and inflationary pressures, especially in countries with a high proportion of unbanked individuals.The global market for cryptoassets, such as Bitcoin and Ethereum, has grown rapidly, with consumer adoption influenced by variables such as level of awareness, degree of trust, ease of use, and perceived utility. The infrastructure supporting cryptocurrencies is spreading internationally, with their adoption associated both with distrust of traditional financial systems and with the existence of well-developed banking services.

It is reasonable to consider that cryptocurrencies may come to compete with or supplant fiat currencies, particularly because of the possibility of tax evasion and independence from the tentacles of the traditional banking system and its fractional reserves.

Losing control over the currency is unacceptable for the State, which depends on it for financing via seigniorage, countercyclical monetary policy, taxation, and economic sanctions.

When the Leviathan finds itself constrained—whether by pressure from interest groups, by the actions of bureaucracies with their own incentives, or by the delegation of functions to the market—it reacts above all through the institutional reconfiguration of its decision-making procedures, creating or adjusting rules, structures, and safeguards intended to recover or preserve margins of control over the collective process.

Historically, States have reacted aggressively to monetary threats: the prohibition of gold ownership in the United States in 1933, the corralito in Argentina in 2001, and the prohibition of cryptocurrency mining and transactions in China in 2021.

Private keys that are memorized (brain wallets) or stored offline are inaccessible without the holder’s cooperation. Unlike bank accounts (subject to court orders), real estate (registered), or gold (physical), cryptocurrencies can be “hidden” in pure information. In other words, enforcement agents have the authority to impose fines and detain individuals; however, they cannot recover the assets in question without the voluntary cooperation of those involved. It is reasonable to deduce that some may choose to endure imprisonment, waiting until they can exploit the illicitly acquired resources after their release. In addition, people may be willing to make sacrifices so that third parties can benefit from the cryptocurrencies.

Thus, it becomes evident that the State will find itself compelled to circumvent the impediment posed by volition.

My prognosis is that we will see the (re)emergence of sentences without an end date, but rather “until the return of the assets owed”; the use of family members as hostages in the most varied scenarios; and, finally, torture. It may seem alarmist and extreme, but we are talking about money, and nothing is extreme enough when the subject is money.

The legislator will have broad support from jurists and academia. Intellectual history shows that extreme state practices often receive retrospective or contemporaneous academic justification: eugenics in the early twentieth century had mainstream scientific backing, and “enhanced” interrogation techniques (torture) after 9/11 were defended by legal scholars.

The paradox remains evident: a libertarian technology triggering the retrenchment of rights and freedoms. Hayek’s denationalization of money will have had as its extreme consequence the negation of core tenets of classical liberalism: the dignity, autonomy, and agency of the individual.