There has been a significant growth in cryptocurrency over the years. Just a decade ago, very few people knew about it, but now it has become a hot topic in conversations. Bitcoin just crossed $60,000 lately, so it is no surprise that it has interested numerous investors. The emergence of the crypto market has tasked the governments to regulate and protect public investment.
Regulations in United States
The United States is not a legal tender for cryptocurrency yet, and the legality depends on the state. There has not been a consistent approach to cryptocurrency due to different interpretations of the laws in different States.
The SEC, which regulates securities of the market, has stated that bitcoin is not a security. They did not release any statement on etherium and Ripple that are the largest cryptocurrencies after bitcoin. hat
Another regulator, Commodity Futures Trading Commission (CFAT) has declared it to be a commodity, just like Gold, and is subject to asset regulations.
Regulating and legalizing crypto may not be as easy as it seems. However, several problems are underlying the system. The nature of cryptocurrency is decentralized, and thus the government or the banks cannot control the demand and supply of the coins. It is the reason government fails to provide any price stability for cryptocurrency and thus discourages its use.
Bitcoin has a history of being used for illegal activities, such as money laundering and purchasing drugs from the dark web. The US FBI banned it in 2013 due to that.
The stigma of illegal transactions is attached to cryptocurrency. That is why the government is cautious when it comes to digital coins. It also has a mysterious history. No one knows who made bitcoins. The real identity of the inventor is still not known. These coins don’t have any physical existence and only exist on the internet.
The times have changed. Now cryptocurrency offers transparency to the users. Every transaction is made public, and people associated can easily be traced. Blockchain prevents threats such as hacking and data theft. Many businesses have started to adopt cryptocurrency, but they are still in minority. Slowly, but gradually crypto is moving away from the stigma and is moving towards a worldwide acceptance.
Regulations around the world
Bitcoin is legal in U.K and japan, including other developed countries. The problem occurs in the emerging economies where heavy regulations are enforced on the usage of digital currencies. India is one of the prime examples that has recently banned cryptocurrency and left the stance unclear.
Even where crypto is legal, it faces lots of restrictions. Many governments regard it as an asset rather than a currency which leads to taxation. It is yet to be considered a legal tender.
Cryptocurrency is too valuable for the government to ignore for long. Experts suggest that the crypto market may continue to grow significantly over the years
Banning crypto would harm innovation and investments. And a proper regulation worldwide is recommended.
Many currencies have now entered the market, and the regulatory bodies may have to work out a solution soon.