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February 22, 2018, 09:38:14 PM |
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Cryptocurrencies will cause a lot of headaches for the regulatory authorities!
Following the path of the communist China would be an utter failure for Western civilization
This will be an interesting year. Cryptocurrencies are becoming more mainstream and regulatory authorities all over the world are racking their brains over how to approach them. Forbidding them is not viable. That would be a road to nowhere, a one-way street. It is impossible to forbid them. To do so, one would have to forbid the entire Internet. The regulatory authorities are in an uneasy position. On the one hand they need to create a framework to prevent money-laundering. To protect investors. To give the whole affair a shape of sorts.
On the other hand, this is a new technology, a completely new perception of the financial world and transactions and how they are being processed. The speed at which value can change hands now is amazing. Value is coded in ones and zeroes, in a few hundreds of kilobytes of data. The ability to actually control it has been significantly reduced. Not to mention the fact that the existing measures look awkward at best – like explaining at an airport why you’re carrying more than 10,000 in cash. With a mobile phone and a mobile wallet you can carry millions in cryptocurrency. No questions asked, no privacy infringed.
At present the regulatory authorities have several options:
1) Take a restrictive stance, hold up a warning finger, and attempt to forbid and threaten. How long can such an approach last? Technology cannot be stopped, it will flatten everything in its path. Strict bans won’t help. The Chinese approach certainly has not been inspiring. And I’m not even going to get into the conversation as to why Western civilization should follow the example of a communist country. Try to stop people from breathing. It’s impossible. Making threats too will lose its effect over time.
2) Lead an open dialogue, set a basic regulatory framework, and learn how the technology works while removing system bugs. The KYC/AML policy is a start. It is already widely accepted by crypto exchanges and their clients. This is the most rational and most reasonable approach. As the old proverb says: Rome wasn’t built in a day. Even Wall Street underwent some development. The current regulations haven’t always been there, they have been introduced gradually as the market developed.
The market that has been developing for over 200 years. Do you remember the “last look” debate about a banking rule that became a news item after the most recent financial crisis? Until then, most Forex clients didn’t even know that banks were using something like that.
At First Crypto ETF we are in close contact with lawyers and regulators. The know-how at our disposal may help set a logical regulatory framework for cryptocurrencies and the general public. 2018 will indeed be an interesting year. Both from the viewpoint of the regulatory authorities and market players alike.
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