Should Cryptocurrency Be Regulated?
The crypto community is gradually expanding all across the globe. On the one hand, true players are pulling money by trading in crypto exchanges and attracting novices to try their hands in crypto markets.
While on other, headlines related to cybercrimes and lost coins, fake projects, crypto scammers, shady transactions, and many more are degrading the reputation of cryptocurrency.
Does the Crypto World Need To Be Regulated?
The cryptocurrency had left no country untouched from its effects since 2017 when the price of Bitcoin skyrocketed around $10,000 on some of the crypto exchanges (Obviously the community gained huge profits!).
In this present scenario, a huge increase in prices of cryptocurrencies and ramp-up popularity is triggering the regulatory authorities all across the world. They are looking forward to formulate rules and regulations for administering this decentralized digital financial system.
Some countries are fully opened to accept while others are completely against cryptocurrencies. While there is a major proportion of countries are trying to understand the benefits of cryptocurrencies and started designing the regulatory rules to safeguard investors engaged in this new kind of currency.
The exponential increase in the price of cryptocurrencies (that might be really high in the coming days!) is creating the dire need for setting up the rules for crypto space. But there is an ongoing debate over which agencies are actually responsible to regulate different types of cryptocurrencies.
How A Regulatory Environment Can Benefit Crypto Space?
Some of the international forums, like G20, signaled to handle the murky crypto crystal ball when the central banks of countries met in Buenos Aires in March 2020. G20 committed to set regulations for monitoring the transactions involved in crypto assets.
If the regulatory crypto space aims to reduce the number of fake ICOs, develop protocols to protect investors against scams, and provide high-quality custody solutions to safeguard crypto assets, then it can benefit crypto players.
Let us explore some more reasons how can a regulatory environment benefit the crypto space:
- Smart and transparent regulatory environment can attract hesitant crypto enthusiasts with fresh investments and better services.
- Regulators of different countries may start developing confidence and start introducing cryptos with limited supply, once the anxiety related to money laundering and financial terrorism will be reduced.
- Governance in the crypto space can help in developing crypto partnerships, allowing several startups and developers to identify cryptocurrency as a great opportunity.
- Digital coins which are still considered as doubtful currency can earn a respectable name in the financial space.
Some Ground Rules before Regulation
To protect investors, increase the confidence of novices, and satisfy various regulators, some ground rules must be considered before introducing or restricting crypto assets:
- Clear and crisp definition must be formulated after having a consensus between regulators and renowned companies in the crypto space.
- No hidden and abrupt rules must be imposed on exchanges, but the clarity of guidelines need to be maintained at the initial stage of the introduction of rules
- Regulations must focus on providing a conducive and secure environment to crypto investors, rather than restricting them to not get involved in crypto investments.
- Anti Money Laundering rules, guidelines related to Know Your Customers, verification, and authentication process, taxation rules must be clearly formulated.
- Businessmen, investors, exchanges, startups, and people associated with the crypto space could be incentivized initially to follow the regulatory rules.
What Does Cryptocurrency Regulation Future Hold?
Undoubtedly, recent meetings of central banks, discussions among the CEOs of crypto giants, and debates around the expansion of cryptocurrency reveal an appetite for a balanced regulatory environment.
Mainstream investors must be assured against loss of their investment in crypto space but overregulated space must not lose its purpose to revolutionize the financial space.
Easy regulations must be there for crypto exchanges but not at the cost of scamming the investors. Innovations must be welcomed but with some regulatory obligations.
The future of cryptocurrency regulation is undeniable but we can hope for a balance regulatory crypto space.