There is a need for global regulation of cryptocurrencies

Cryptocurrency market is growing Trapped By regulators and financial institutions in various countries around the world. Many regulators have views on this asset class because they consider it extremely dangerous to the economic stability of countries, and although they don’t say it directly, one of the main goals is to ban or restrict it so that it does not. It generates big problems.

This situation is experienced all over the world. For example, the UK’s Financial Conduct Authority recently said that there is a need for rules for cryptocurrency. The fact is that these rules cannot be local, but global. This assumes that global regulation is the goal in order to control the use of cryptocurrencies and the market in general, as the issue of crypto-related companies, such as Binance and other digital asset exchanges, has been addressed.

It seems that the main objective of these organizers is “Keep the market clean“By stopping any type of asset or economic activity that puts investors at risk, as well as financial stability. For example, cryptocurrencies have long been in a regulatory gray area and this should stop because these loopholes lead to large numbers of people using cryptocurrencies in illegal activities.

Global regulation is the solution

This is not the first time that global regulation of cryptocurrency has been mentioned. This topic has been discussed countless times by organizers all over the world. The idea of ​​global regulation, at least from this point of view, could eliminate many problems in the market, because if all countries set identical regulatory standards, there would be no room for crime.

The fact is that developing such an organization is not easy. If we look at the case of unregulated crypto companies, there are many crypto companies in the world. An important point to bear in mind is that many countries have taken little interest in establishing real controls to combat criminal activities such as money laundering. In fact, while some countries are looking for alternatives to regulating cryptocurrencies, others, such as El Salvador, have accepted it as legal tender.

But it’s not about strict regulations like those of China. In the case of the British Treasury, it closely examined the risks of cryptocurrencies, as well as the opportunities associated with this type of asset. This approach took into account social inclusion, the need for organizational change and the imminent need to advance issues of technology applied to the economy.

Although the possibility of exchanging fiat currencies for decentralized cryptocurrencies is not the main topic, or these currencies work together legally as in El Salvador, some revisions have been requested. It will take into account the pros and cons of this process to determine the next organizational step.

And while the possibility of developing central bank money was not directly discussed, it is certainly a topic that has been quietly broached. Projects of this kind are beginning to develop in different parts of the world, with some analysts claiming that central bank cryptocurrencies are the future of the economy.

Protection is required

Cryptocurrencies are very volatile assets, which is why it is necessary to protect them from meltdowns. If we look at the position of the Financial Conduct Authority, we realize that last year they did not allow Binance, the world’s leading cryptocurrency exchange, to operate normally because such platforms are not in the regulations. But now, almost a year later, Spain, France and Italy have allowed Binance to operate, which could be a positive move for the market.

It is clear that governments must protect the traditional economic structure, and it is hoped that users will be kept safe as well. But today, with the recent market crash, the search for regulation to keep users safe is becoming increasingly important.

It is impossible to deny that there are some risks associated with cryptocurrencies, but it is undeniable that they have certain advantages. For now, the challenge for regulators is to strike a balance between allowing the use of cryptocurrencies and protecting economic stability. This is why so few countries have made progress in regulating, because regulating this type of asset is more difficult than it seems.

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