The cryptocurrency industry has come a long way, coins, and tokens of all sorts have been created. The industry has attempted to stabilize the market´s volatility in every way possible. Some nations have set up regulations, however not enough countries have done so.
Needless to say, the traditional monetary system of the world has been dramatically threatened because of cryptocurrencies.
We have come to a dead-end; the next step would be regulations. The crypto industry has been waiting for this for a long time. Although, many do not aspire to regulate cryptos because they feel tied up to the government.
Regulations would encourage consolidated companies to invest and engage further. Crypto businesses would thrive. All of this would bring stability to the market, and inevitably bring in more users and adopters.
Cryptocurrencies are also known as anonymous digital currencies. They could be referred to as:
- Digital currency
- Virtual currency
- Cyber currency
- Electronic currency
- Virtual asset
The common basis that correlates all of them is the blockchain, making them the same decentralized technology.
These coins and tokens are all considered a medium of exchange of some sort. Traded in virtual environments as they all carry some value and use case.
1. Stabilize Values
We have seen a rollercoaster in the cryptocurrency prices. If regulated it would drive to more adoption, and as stated earlier, more adoption means more stability.
2. Eliminate Fear
Again, this point will complement the first.
If the cryptocurrency industry would find a common ground, regulate the market it would organically eliminate fear. All the investors and speculators waiting on the side line would finally feel comfortable to join the community, lead to more adoption.
This is the section that brings most confusion because cryptocurrencies are treated differently from one country to another. In some nations, cryptos are considered money, commodity, asset or token.
Inevitably each country will tax them (or not) according to their taxation jurisdiction. The main issue is that most countries are very unclear about it.
However, there are countries such as Malta, a reliable example of good crypto taxation, which other nations should use it as a role model.
If each country could classify cryptos with transparency, which regulations could help to settle that, then each nation would tax it accordingly without confusion.
4. Prevent Fraud
It is believed that many illegal activities including money laundering are financed by cryptos. Though, this is not something exclusive of cryptos, because this has always been an issue with various fiat currencies before the existence of cryptos. However, if the industry gets regulated it would make it more manageable to control all these illegal activities.
Unfortunately, we cannot stop it completely, fraudsters will always find a way to curb the law, but just as we can control it with fiat currencies today, so would we be able to do it with cryptos.
Cryptocurrencies must be regulated, yet, in a way that will not kill their essence. I believe it´s safe to say that in the cryptocurrency community no one agrees that we should give the government any level of power over cryptocurrencies, however, there are ways of doing so without messing with its essence. Check out countries that are examples of this already, such as Switzerland, Slovenia, Malta, etc.
Regulators should clear up the tax situation, create a framework for ICOs, establish a working group of blockchain experts, economists, policy workers (etc.), let exchanges manage ICOs, and so on.
“When existing money system has problems, people turn to bitcoin sort of like when people used to go to gold in the old days.” — Bobby Lee co-founder and CEO of Bitcoin Exchange BTCC (Via CNBC)
We cannot stop people from using cryptocurrencies because it solves plenty of issues with fiat currencies. Regulators should see this in no time and regulations should gradually take place around the globe.
The G20 will come together to figure out a collective set of regulations. But each country will and should also have their own regulations.
So, let´s see where this takes the industry.
Let us know what you think in the comments.
Disclaimer: Our team works hard to bring you the best content in the cryptocurrency market, but it is only our point of view and not legal advice, and may be divergent from other opinions, so please do not make any decisions without concluding studies of your own to understand the profit possibilities and uncertainties involved at your own risk.