Legalities and cryptocurrency growth
The way governments react to the cryptocurrency movement will have a huge impact on the way people trade and use cryptocurrency in the coming years, whether we like it or not. Investors looking to get into cryptocurrency trading may often worry about looming regulations that could affect the market’s behavior. However, many cryptocurrency experts and enthusiasts welcome regulations and think that a clear regulatory code will help newcomers understand the crypto space and invest with confidence.
As of now, in many countries the laws regarding cryptocurrency are not exactly clear and business friendly. The lack of clarity surrounding taxes alone hurts the volume of money coming into the cryptocurrency markets, but strict crackdowns are even more damaging.
In China, exchanges are illegal and the trading and selling of Bitcoin and altcoins is technically prohibited. That is over 1 billion people that are being restricted from buying cryptocurrency. Before the crackdown in China, the trading volume coming from the country was very high and the strict laws that have been implemented have certainly hurt the word crypto market overall.
Another problem that slows the growth of cryptocurrency’s total market cap is the banning of initial coin offerings or ICOs. The United States is the biggest consumer market in the world and is not only a leader in buying gadgets, but also hungry to invest in budding tech startups. In the US, ICOs are labeled as securities. This complicates the process for Americans wishing to buy ICOs and the startups wishing to sell them.
Cryptocurrency is not legal tender in most countries. Consumers most places in the world do not have readily available options to spend cryptocurrency. Therefore, the growth of the market relies heavily on speculation rather than use and transactions. In countries where Bitcoin and other cryptocurrencies are legal tender such as Japan, cryptocurrency transactions are way less rare and the market sees higher volume than anywhere else due in part to the greater awareness larger frequency of transactions. South Africa is another country is crypto friendly and has taken on the role of a sort of incubator for blockchain growth. The crypto friendly laws of South Africa will allow Bithemoth to be fully compliant with the law while avoiding legal issues that could be faced in countries with tighter laws such as the United States.
As the cryptocurrency movement continues to grow, more countries will be finding it in their best interest to loosen the laws regarding cryptocurrencies and ICOs.
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