Transparency, decentralisation and no border limits. Bitcoin and other cryptocurrencies are the embodiment of these features. However, with the rapid growth of the volume and amount of money invested in these assets, the voices for regulation are getting louder and louder. The widespread use of ICO and STO contributes to debates as the countries aim to protect the investors and their money.
Regulation — Yes, or No?
The critiques of the regulation claim that the cryptos are designed to be unregulated. On the other hand, the supporters voice for the protection of the investments. They argue that the completely deregulated market can cause that the investors lose all their life savings in less than an hour.
Another problem lies in the character of the regulation. The traditional banks and state institutions can guarantee the safety of entrusted money. However, the world of the Internet is far from being that simple. It is much more challenging and time and money consuming to track the thief who can hide everywhere in the world than to catch traditional bank robbers.
Who Regulates and How?
There is no type of regulation accepted by the countries worldwide as the individual states utilise different procedures. The USA government reacted swiftly on the increasing interest in the cryptocurrencies and started to treat them as commodities regulated by the US Securities and Exchange Commission (SEC). Although they aren’t considered as monetary assets, every merchant can accept them as payment.
Cryptos have been widely popular in Asia since their first appearance. Individual Asian countries approach them differently. Japan recognises Bitcoin as an official payment system, Singapore treats cryptocurrencies as commodities similarly to the USA.
Fierce discussion took place in South Korea which even considered the general ban of every crypto assets. At the beginning of 2018, the country decided that it would not ban the trade and that it is also possible to use cryptos for any transaction.
The regulation policy in Europe is friendly and definite. The European Commission considers the use of blockchain technology for its purposes. It regards cryptos as a monetary asset and supports Bitcoin as an official payment system. Russia, however, applies much stricter laws and regulates the trade.
The regulations also have an impact on the tokens. Companies developing security tokens require licensing approved by the SEC and other regulatory institutions worldwide. Thus, the investors can be sure that their tokens enjoy the same status as any standard asset on the stock market. As far as the utility tokens are concerned, the regulative means are much milder.
What Lurks in the Shadows?
There have been several confirmed cases of money laundering and terrorist financing using the crypto assets. The shadow economy makes use of the decentralised character of the cryptos and partial anonymity of their owners. Further regulation aims to reduce these problems, but it may destroy the specific features of the tokens in the process.
Imposition of the regulation won’t harm the whole crypto scene. Assets, deeply connected with the traditional financial sector, as XRP will remain untouched. Nevertheless, the overall volume in the market is going down with every decision of every country.
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