The fight between cryptocurrencies and national governments has been raging on for quite some time. Regulators have always taken a stern approach to cryptocurrencies like Bitcoin for a long time.
The fact that cryptocurrencies like Bitcoin are decentralized has created newer challenges for regulators looking to protect the interests of normal citizens. From being overtly criticized as funding illegal activities, to looking upon Blockchain technology as the next big thing, the regulation industry has come a long way.
In this article, we are going to look at cryptocurrencies and regulations. We are going to shed light on the positives as well as the negatives of the same. We are also going to discuss what the future holds for cryptocurrencies.
Cryptocurrencies and Regulations: A Brief Introduction
It is fair to say that Bitcoin and other cryptocurrencies have come a long way in the last ten years. For many the formalization of cryptocurrencies means that they now enjoy a far more mainstream acceptability.
This has made government agencies and international organizations engage with cryptocurrencies in a serious manner. While purists are completely against any form of regulation, given the ethos of decentralization, other members in the ecosystem are more welcoming of the increased engagement levels.
When Bitcoin first emerged, it was dismissed by all as some kind of a Ponzi scam intended to rob people of their hard-earned wealth. In the subsequent years, countries like Canada, Germany, Australia, Singapore and South Korea have given a major boost to the crypto economy.
Are Regulations a Good Thing for the Crypto Universe?
To understand this aspect, it is important to divide regulators into two sub-categories-
1. Public Regulators-
When we talk of public regulators, we intend to mean the national governments, the finance ministry, the revenue departments, the national courts of law and the central banks of respective countries. Government authorities and agencies are considered as public regulators.
2. Private Regulators-
This involves mainstream private corporations in the world like Visa, MasterCard, PayPal and others. These companies are so well integrated into the global financial order that they control global financial systems in a major way.
In order for Bitcoins and others to be a success, it is important that both public and private regulators are on board. Experts who favour regulations point out that it is essential to help crypto go mainstream. If one of the big private players endorses Bitcoins and Blockchain, then others will also start to take notice.
Why do Purists Oppose Regulations of any kind?
According to the purists, the fundamentals of Bitcoin make is antithetical to the interests of the bodies mentioned above. In other words, the rise of Bitcoin as a global standard currency for exchange would end the existence of PayPal!
The question then is, why would PayPal support something, which would ultimately kill it? Purists also point out that the recent withdrawal of support of Visa and other big fintech corporations from Facebook’s Libra also shows that private regulators are having nothing.
As opposed to Bitcoin, Libra is supposed to be much more conventional and safer as a stablecoins, intended to be backed by physical assets. Purists’ state that regulators pulling the plug from Libra show that all of them perceive newer fintech models to be nothing but a threat.
They also state that regulations of any kind are against Satoshi Nakamoto’s vision of a completely decentralized currency setup.
The Final Word
In the past few years, the growth of credible trading platforms like the Crypto App 2020 mean that Bitcoin and other cryptocurrencies are seeing favourable growth. It also means that even with stiff opposition, many people are now becoming aware of the benefits of using cryptocurrencies as opposed to traditional currencies.
People who support regulation believe that support from that front is going to bring in credibility and trust in the entire process. While purists opine that organic growth is the best way forward for cryptocurrencies.
What do you think of the same? Let us know in the comments section below.