Crypto and regulation
A blog talking about regulation, Bitcoin, and alt coins.
Bitcoin and other cryptocurrencies have been in the spotlight at various points. It seems like everyone is intrigued by them, but most people don’t truly understand what they are or how they work. Cryptocurrencies like Bitcoin are digital currencies that use encryption to secure transactions. There’s a strong possibility they’re also the future of money because they’re cheaper, faster, and more secure than traditional fiat currencies like the GBP, dollar or euro.
As the number of people using cryptocurrencies grows, so does the need for regulation. The U.S. government’s response to this growing trend has been mixed: while they allow Bitcoin to be used as currency, they haven’t yet made any laws regulating its use. Regulation is at different stages in different parts of the world but one similarity amongst them all, a lack of clarity.
Cryptocurrency regulation is an important issue because it affects how people use and invest in cryptocurrencies. If you want to be a part of this growing trend, you need to know what the future looks like. But what is cryptocurrency regulation? In general, it’s a set of rules that govern how people use and invest in cryptocurrencies. These regulations can be very different depending on the country where they are created. Some countries like China have banned all forms of cryptocurrency while others like the United States allow them to be used as currency but not regulated at all. In the United States, cryptocurrency is considered property rather than currency and is not regulated by the government. With that said there are governing bodies such as the SEC who are seeking the power to regulate cryptocurrencies. This means that people can buy and sell cryptocurrencies freely without any legal restrictions. But it also means that investors have no protection from fraud or theft if something goes wrong with their investments. In order to protect investors and make sure they are not taken advantage of, the SEC created a set of regulations that all companies must follow when they create a cryptocurrency. This includes registering their ICO with the SEC so that investors can be sure it is legitimate. However, the SEC’s rules are inconsistent at best and they are currently facing scrutiny from US governing committees and members of the crypto community such as Coinbase.
It is important to keep regulatory developments in your peripheral vision. Here is a quote regarding the development of the MiCA bill in the EU
“MiCA will cover crypto-assets that are not regulated by existing financial services legislation. Key provisions for those issuing and trading crypto-assets (including asset-reference tokens and e-money tokens) cover transparency, disclosure, authorisation and supervision of transactions. Consumers would be better informed about the risks, costs and charges linked to their operations. In addition, the new legal framework will support market integrity and financial stability by regulating public offers of crypto-assets.
Finally, the agreed text includes measures against market manipulation and to prevent money laundering, terrorist financing and other criminal activities. To counter money-laundering risks the European Securities and Markets Authority (ESMA) should set up a public register for non-compliant crypto assets service providers that operate in the European Union without authorisation.”
In my view the uncertainty regarding crypto regulation is the greatest threat to future price action. It seems that BTC will evade regulation due to its decentralised nature however, alts coins could be at far greater risk.