Governments wouldn't have to declare bitcoin explicitly illegal. Instead, governments would simply make them impossible to exchange for official currency by de

Governments wouldn't have to declare bitcoin explicitly illegal. Instead, governments would simply make them impossible to exchange for official currency by denying bitcoin providers access to the banking system (by closing bank accounts, defining bitcoin as "high risk for money laundering"). Under such a scenario, governments could also prohibit banks themselves from transacting in bitcoins. In such an event, if governments were then to enforce the requirement that any income earned in bitcoin be paid as taxes in official currency, holders of bitcoin would find themselves liquidating non-bitcoin assets in order to pay their tax bill.