With the excitement about new technologies, humanity has seen improvements in so many spheres. From medicine and scientific investigations to space exploration and banking, technological advances have left no area of our lives unaffected.
Cryptocurrency is not a new word in finance. However, as it grows and transforms itself, it gets implemented worldwide. Nowadays, one can make payments in crypto for online services or when ordering goods. Cryptocurrency has gone even further: supporting charity projects, tipping employees, earning crypto in games, and more. Anyone can exchange XMR to EUR online and stake, mine, and trade coins without third parties dictating rules.
Along with the good sides and amazing uses, crypto adoption may cause confusion for many governments as regulators constantly express a growing concern. On the one hand, the innovation is celebrated. On the other hand, investors and authorities want to make the sphere safer for themselves and take it under control.
In a way, they are quite right. If risks and bugs are addressed, we get a more effective and reliable financial system all over the world. At the same time, these limits should drive the growth of the cryptocurrency and the technology behind it, encouraging transparency and entering other spheres, too. As you can see, the debate around regulating crypto doesn’t cease, so let’s get into it and see if they are actually helping crypto evolve even more or acting as a hindrance.
What Regulations of Cryptocurrency Already Exist in the U.S.
In the view of political powers and those at the head of the banking sphere, crypto needs to be regulated because decentralization is its central idea, protecting customers and preventing money laundering. For instance, the U.S. government came up with the framework called to drive ‘responsible development of digital assets.’ Especially after the breakdown of the FTX exchange and the Commodity Futures Trading Commission suing two crypto giants, Binance and Coinbase, for offering unbounded access to crypto products, especially unregistered ones, the approach to limiting has become more proactive. While the U.S. doesn’t seem to be extremely friendly to crypto, the framework remains just a set of recommendations.
One of the results of being strict with digital asset selling in the United States is that many companies change countries to continue their usual activity and thrive. This side effect of regulations proves that all laws concerning digital currencies need to be well-formed, thoughtful, and take into consideration multiple sides of the medal.
In What Ways Are Crypto Regulations Good for Those Investing?
But let’s draw a bit away from seeing crypto-limiting laws as aggressive and overly restricting. There are actual benefits for users when they come into play. Here belong:
- Protecting traders and investors.
Even though crypto itself is a high-risk investment, working on the safety of markets is likely to drop risks of fraud and manipulation. When the market is fair, and user’s assets submit to federal authority regulations, there’s less fear in buying crypto. As we see, the world needs this since over 14 billion USD were lost as a result of fraud in 2021 only. Moreover, the pattern repeats each year.
- Stabilizing the market.
Stability is vital for attracting users willing to invest in the long run. Laws that target this would be great in making coins fluctuate less (even though, once introduced, markets may see drops).
For instance, the benefits of this are seen in stablecoins. People are exchanging to USDT and other stables because they don’t want just to speculate on the price short term: it’s more about running a marathon, not a sprint.
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