Tariffs, capital controls could fragment blockchain networks — Execs
Escalating geopolitical tensions threaten to balkanize blockchain networks and restrict users’ access, crypto executives told Cointelegraph.
On April 9, US President Donald Trump announced a pause in the rollout of tariffs imposed on certain countries — but the prospect of a global trade war still looms, especially because Trump still wants to charge a 125% levy on Chinese imports.
Industry executives said they fear a litany of potential consequences if tensions worsen, including disruptions to blockchain networks’ physical infrastructure, regulatory fragmentation, and censorship.
“Aggressive tariffs and retaliatory trade policies could create obstacles for node operators, validators, and other core participants in blockchain networks,” Nicholas Roberts-Huntley, CEO of Concrete & Glow Finance, told Cointelegraph.
“In moments of global uncertainty, the infrastructure supporting crypto, not just the assets themselves, can become collateral damage.”
According to data from CoinMarketCap, cryptocurrency’s total market capitalization dropped approximately 4% on April 10 as traders weighed conflicting messages from the White House on tariffs amid a backdrop of macroeconomic unease.
Crypto’s market cap retraced on April 10. Source: CoinMarketCap
Related: Trade tensions to speed institutional crypto adoption — Execs
Bitcoin’s vulnerabilities
Bitcoin (BTC) is especially vulnerable to a trade war since the network depends on specialized hardware for Bitcoin mining, such as the ASIC chips used to solve the network’s cryptographic proofs.
“Tariffs disrupt established ASIC supply chains,” David Siemer, CEO of Wave Digital Assets, told Cointelegraph. Chinese manufacturers such as Bitmain are key suppliers for miners.
However, “the greater threat is the erosion of blockchain’s core value proposition—its global, permissionless infrastructure,” Siemer said. This could be especially problematic for everyday crypto holders.
“If global trade breaks down and capital controls tighten, it may become harder for citizens in restrictive countries to acquire bitcoin,” said Joe Kelly, CEO of Unchained. “Governments could crack down on exchanges and on-ramps, making accumulation and usage more difficult,” Kelly added.
Bitcoin’s performance versus stocks. Source: 21Shares
Ironically, these types of fears also underscore the importance of cryptocurrencies and decentralized blockchain networks, the executives said.
Bitcoin has already shown “signs of resilience” amid the market turbulence, highlighting the coin’s role in hedging against geopolitical risks.
“While the environment is challenging, it also creates an opening for crypto to prove its long-term value and utility on the global stage,” noted Fireblocks’ executive Neil Chopra.
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Thousands of savers face potential losses after a $2.7 million shortfall was discovered at Ziglu, a British crypto fintech that entered special administration.
Politics
Heidi Alexander says ‘fairness’ will be government’s ‘guiding principle’ when it comes to taxes at next budget
Another hint that tax rises are coming in this autumn’s budget has been given by a senior minister.
Speaking to Sunday Morning with Trevor Phillips, Transport Secretary Heidi Alexander was asked if Sir Keir Starmer and the rest of the cabinet had discussed hiking taxes in the wake of the government’s failed welfare reforms, which were shot down by their own MPs.
Trevor Phillips asked specifically if tax rises were discussed among the cabinet last week – including on an away day on Friday.
Politics Hub: Catch up on the latest
Tax increases were not discussed “directly”, Ms Alexander said, but ministers were “cognisant” of the challenges facing them.
Asked what this means, Ms Alexander added: “I think your viewers would be surprised if we didn’t recognise that at the budget, the chancellor will need to look at the OBR forecast that is given to her and will make decisions in line with the fiscal rules that she has set out.
“We made a commitment in our manifesto not to be putting up taxes on people on modest incomes, working people. We have stuck to that.”
Ms Alexander said she wouldn’t comment directly on taxes and the budget at this point, adding: “So, the chancellor will set her budget. I’m not going to sit in a TV studio today and speculate on what the contents of that budget might be.
“When it comes to taxation, fairness is going to be our guiding principle.”
Read more:
Reeves won’t rule out tax rises
What is a wealth tax and how would it work?
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Afterwards, shadow home secretary Chris Philp told Phillips: “That sounds to me like a barely disguised reference to tax rises coming in the autumn.”
He then went on to repeat the Conservative attack lines that Labour are “crashing the economy”.
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Chris Philp also criticsed the government’s migration deal with France
Mr Philp then attacked the prime minister as “weak” for being unable to get his welfare reforms through the Commons.
Discussions about potential tax rises have come to the fore after the government had to gut its welfare reforms.
Sir Keir had wanted to change Personal Independence Payments (PIP), but a large Labour rebellion forced him to axe the changes.
With the savings from these proposed changes – around £5bn – already worked into the government’s sums, they will now need to find the money somewhere else.
The general belief is that this will take the form of tax rises, rather than spending cuts, with more money needed for military spending commitments, as well as other areas of priority for the government, such as the NHS.
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