Hacker News Reader

So wherein lies the liquidity problem?

I deposit USD to an exchange...then use that USD to place a Bitcoin buy order. Then I sell some Bitcoin another buyer on the exchange, who was only able to make this transaction happen because they too deposited USD or fiat into their account.

I get the money, they get the Bitcoin. Who is getting screwed?

View on HN

If the banks cut off access to the funds (e.g.: GDAX can no longer accept USD deposits/withdraws, or possibly even the funds in their own accounts) they basically can't be considered an "off ramp" anymore. If all exchanges were barred from doing business from U.S. banks, than there is no way to get money from 1 BTC (or any other denomination/currency). Herein lies the screw.

LocalBitcoins would become a seller or buyers only recourse, for U.S. customers anyway, which takes a lot of coordination/time, and essentially becomes an obvious form of money laundering.

Ok, so the problem is in the legal arena; the government bans banks from allowing cryptocurrency transactions.

This doesn't seem like a fundamental problem due to the structure of Bitcoin or exchanges.

Reply on news.ycombinator.com