Why it’s better to trade with a regulated company

There is more talk than ever about regulation in the crypto sphere. In fact, some say it’s turned into a trend. As crypto becomes too big to ignore, governments around the world are starting to discuss regulation, asking themselves what the future should look like and what role crypto should play in it.

But it’s not just nervous governments that are talking about regulation. Crypto and blockchain ventures themselves are increasingly looking to a regulated future and even working with legislators to make it happen. But why? Is this just some passing fad? Businesses in many industries spend considerable time and resources in avoiding regulations, so what’s so different about crypto?

Better for everyone — but especially traders

The answer is that regulation is better for everyone involved in crypto. Governments, users and crypto entrepreneurs all have a vested interest in the regulation of crypto. But those interests all begin with the users — or crypto traders. A large part of the reason crypto innovators want regulation is to attract more users, and a large part of the reason governments want to regulate crypto is to benefit from the responsible growth of a technology that could change the course of the future for society.

That’s why regulation all comes down to the traders. So, what’s in it for them?

Safety

As word about crypto and blockchain spreads around the world, investors, innovators, entrepreneurs and even the average Joes are increasingly aware of the theoretical potential of trading and using crypto. The removal of financial middlemen, instant cross-border transactions and complete financial transparency are all principles, the benefits of which are beginning to be seen by a globalized world.

And yet, all these potential traders are hesitant to jump on board — largely because there is no legal recourse, no legal safety net in the crypto sphere. Traders don’t just want safe investments that will yield financial returns, they want — rather, they need — a guarantee that no one is cooking the books or trying to scam them.

Particularly because crypto is new and it’s a technology that most potential traders do not understand in-depth on a technical level, there is an inherent fear that they could be manipulated and deceived without their being aware of it. Regulation has the power to put an end to these worries, creating the kind of oversight that says “I’ve got your back.” Traders with a regulated crypto company can rest easy knowing that the company they trade with won’t pull any dirty tricks on them because otherwise, that company wouldn’t have met regulation standards in the first place.

Trust

The crypto industry also suffers from a perception issue, and no one wants to actively trade in an industry they can’t trust. Even for those who understand the beneficial principles of crypto and blockchain, it is probably more common to see stories about price volatility, the Dark Net, cybercrimes, scams and hackers. Those of us in the industry know that’s not even a hundredth of the whole picture of crypto, but with media coverage being what it is, outsiders can be forgiven for looking at crypto with suspicion.

Regulation can also go a long way towards solving this problem of perception and finally give traders access to the benefits of crypto with complete confidence. When we deposit money in the bank, very few of us worry whether that money will be there tomorrow (except in truly exceptional economic circumstances). This is partly thanks to years of experience of always having access to the money you deposited, but it’s also because of federal guarantees and other regulations that make sure you have access to your money, no matter what. Without these regulations, fewer people would be depositing their money in banks and would never accrue the years of good experiences that have built trust over time.

Mass adoption

The holy grail is mass adoption of crypto. Crypto entrepreneurs and innovators want as many people to use and trade crypto as possible, partly because that’s good business, partly because every blockchain becomes stronger when more people use it and partly because they believe in its transformative power for the future and they want all of humanity to benefit.

Regulation isn’t the one key to mass adoption — there are several directions to be pursued at once to achieve that goal — but it is the foundation, the backbone for mass adoption, creating an environment in which potential traders have no excuse to say no anymore. Then they can reap all the benefits of trading in crypto with security and trust in the institutions they work with.