Interest in the cryptocurrency has been renewed in a big way. After a rough end to 2018 and beginning to 2019, the cryptocurrency market is finally rebounding and seeing some growth. The industry is front-page news once again and many people are looking to participate in it or talk about it.
Regulation has always been one of the single biggest talking points in the industry. In the USA and many other nations around the world, most currency and investments are regulated by the government or very large and established regulatory bodies. The regulation aims to ensure everything is fair, transparent and by the book.
However, that is not the case with cryptocurrency. There is no single large regulator in charge of cryptocurrency. While some love this and the fact that no central authority controls or monitors the currency, others feel the market would benefit from some more regulation. They also believe that regulation would even help the crypto industry grow and mature. But is that the case? Can regulation help cryptocurrency mature and grow?
This is a complex question and answer, but this blog post will look in deeper details into the topic and question. Without any further ado, this article will look at whether or not regulation can help cryptocurrency grow and advance.
Pros and Cons of Cryptocurrency
Before looking at regulations in the world of cryptocurrency, we need to look at cryptocurrency itself. In order to understand the impact that regulation has and could have on cryptocurrency, we need to understand crypto inside and out. In an effort to help, we are going to look at several pros and cons of cryptocurrency.
Pros of Cryptocurrency
- It is anonymous and transparent. Users love this as it is private, yet every transaction can be viewed by anyone at any time. This prevents anyone from hiding transactions or doing things under the table.
- Cryptocurrency is completely portable and available 24 hours of the day. You can access anytime from anywhere.
- The transactions are incredibly quick and affordable compared to traditional transactions. This is potentially the pro that could have the biggest impact on the financial industry as we know it.
- It can be an incredibly fruitful investment that could lead to large gains, as long as you are careful and aware of the risk.
Cons of Cryptocurrency
- It can be hard for many people to understand. Those who aren’t well-versed in the space or tech-savvy might struggle to comprehend what cryptocurrency is. This can hurt widespread adoption.
- Their markets fluctuate incredibly quickly, which makes them tough to be used as an actual form of currency. They also aren’t accepted by a ton of different vendors, and as a result, aren’t the most usable.
- Crypto scams, hacks, and other shady behavior are unfortunately quite common in the space. While their anonymous nature can be a pro, it can also allow criminals, hackers , and other unsavory individuals to operate without detection.
- There is no way to be compensated for coins that are lost or misplaced, so losing your coins is a real threat.
This is far from an exhaustive list but should give you a good understanding of the best and worst of the cryptocurrency industry.
How Do Regulations Impact Cryptocurrency?
Now that you know many pros and cons of cryptocurrency and the industry surrounding them, how do regulations impact crypto? Well, they can impact cryptocurrency in a lot of ways. First of all, they will likely reduce the volatility of cryptocurrency. Unfortunately, this will also mean the potential for huge investment growth will also be reduced.
Regulations will also legitimize many cryptocurrencies and help reduce the risks that many investors might take on. This on its own should help more people participate in the industry, especially those who were scared off by the “lawless” nature of cryptocurrency.
Many crypto scams are also allowed to continue operating today without any regulations or restrictions in place, and they aren’t always easy to identify or sniff out. Having regulations and guidelines in place will stop many of these scams from being able to target and take advantage of anyone else.
As you can see, there are many ways that regulations can impact crypto, but how exactly they impact will depend on what is regulated, and how strongly.
Will Regulations Help Cryptocurrency Mature?
So will these regulations in the cryptocurrency help cryptocurrency mature? Well, the answer is probably yes, but it is tough to know for sure. Regulation measures will certainly help cryptocurrency to become more legitimate, which will help more people to gain some trust in the sphere. The regulation will seek to ensure fairness and transparency in the space, just like they do with securities, commodities, currency and more.
Also, because of the “wild west” nature of cryptocurrency, especially in the USA, crypto start-ups and innovations have been suppressed for years. Because of the many legal grey areas and uncertainty, these firms or individuals are sitting on the sidelines. If regulations are in place that will dictate what is legal or illegal, and allowed or disallowed, it will let these innovators finally begin to innovate.
While regulation will likely differ from country to country, there are also some who believe we will see a global framework for cryptocurrency. While this could be possible, many nations around the world already have their own rules and regulations for crypto in place, and getting everyone on the same page may be difficult. Also, crypto adoption or belief in the market/industry isn’t the same everywhere.
However, not everyone is excited about regulation. Some feel that the governments should simply leave the markets as is and allow them to take care of themselves. They love the idea of governments not intervening and allowing the market to continue operating as normal. Their fear is that the regulations will limit the growth, success, and opportunity of the cryptocurrency industry.
So ultimately, the answer is that regulations will probably help the market mature. However, it is tough to know the answer until we find out what sorts of regulations are in place, how stringent they are and how they are applied. But if the regulations are done right and encourage innovation, all while helping increase crypto adoption, it could certainly help the industry mature.
In conclusion, we hope that this article has been able to help you learn more about crypto regulation and whether it can help the industry mature.
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