how governments can regulate digital currencies?

[ecnalubma]

Though it’s easy to see why governments would want to regulate the movement of digital currencies, the reality of doing so is much harder. A lot of wallets have no identification to them and rest on a server in a third party country. In the case of offline wallets in devices such as the Ledger Nano, they’re not connected to any network.so is it possible to regulate ?

Thats what makes decentralisation unique, government cannot control this space unless they cut the relation of the bank and crypto. But this might be hard because different countries have different views and treatment about crypto, banks are always in the money so how can they refuse to take part in this growing industry.

[killerfrost]

I think the government can adjust the digital money. The government will introduce strict regulations for the development of digital money. Some governments only allow quality coins to operate.

[BitcoinPanther]

If you are asking a redesign on the blockchain's core technology where pseudonymity is in effect, i think that would really be difficult to regulate. Making such changes may simply destroy the whole concept of cryptocurrency.

But, if you are referring to regulating the exchanges where we transact our bitcoin with or with the merchants that accepts bitcoin as a payment, then it is already being done. Most of us had already submitted to the regulation with the KYCs we made.

Though most exchanges point out that we can remain pseudonymous if we want to, most of us allowed ourselves to submit under particular KYC procedure (which at times include selfies and video messages to prove our identities) so that we can take better advantage of increased transactional allowances. And though at times it feels that the KYC goes way beyond what is really needed, it feels like we have no choice really since it was mandated by the government against the exchanges should they wish to continue operations.

[deppil]

Interesting question. But keep in mind they are government which means they have access to almost everything, even great people, hackers, it, computer geniuses etc. That is why I believe they could hire very smart people to help them regulate cryptos, or maybe they are already doing it, they are only waiting to apply it officially, who knows? Never underestimate the government.

Yeah government can do it if they wanted to but this will affect how people invested in crypto as they believe that they want to have no control from the government and being decentralize currency without the use of third party. Maybe government can collect taxes from crypto if they have the control on all exchanges. 

I think the government really wants the control in crypto to happen. they will not care about the feelings of users who want decentralization or not what the government wants is legalization that can control crypto users. but the government doesn't know how

[bittraffic]

Interesting question. But keep in mind they are government which means they have access to almost everything, even great people, hackers, it, computer geniuses etc. That is why I believe they could hire very smart people to help them regulate cryptos, or maybe they are already doing it, they are only waiting to apply it officially, who knows? Never underestimate the government.

Yeah government can do it if they wanted to but this will affect how people invested in crypto as they believe that they want to have no control from the government and being decentralize currency without the use of third party. Maybe government can collect taxes from crypto if they have the control on all exchanges. 

I think the government really wants the control in crypto to happen. they will not care about the feelings of users who want decentralization or not what the government wants is legalization that can control crypto users. but the government doesn't know how

Of course the government knew. Its just a matter of time, we'd all be under am exchange controlled by government. They've been watching us for years, probably even scraping all the email addresses in this forum. But the most recent is the KYC on exchanges which they mandate allowing the government to check information.

[erickkyut]

I think so, How the governments can regulate a digital currency, they can't control decentralized things like the bitcoin. No one knows the owner of the bitcoin, who is Satoshi Nakamoto, where is he now! No one has any idea about that. So, how can government control or regulate the bitcoin? It is not possible as my knowledge says.

I agree. There's no way a government can directly regulate digital currencies like Bitcoin. They can make rules and regulations but they cannot control it because from the start, cryptocurrencies are decentralized. They can make government owned exchange sites but they can't tell the people to not use those private exchange sites.

[bolbau]

if the government wants to fundamentally regulate cryptocurrency / digital assets it might be very difficult. and that is the reason why they are trying to fight this industry since the beginning of the year. but it cannot be denied that crpyto is growing and cannot be rejected by the times.  rather than thinking about ways to regulate crypto as a whole, such as offline wallet etc. the government can still regulate in the form of crypto control in their territorial context rather than the world as a whole. they can use KYC and AML rules against local exchanger before digital money is converted into the country's currency. impose a tax on every transaction on a local exchanger. why can i say those two things? because that is what has happened in my country today. the crypto community cannot fight the government seporadically, so we must respect the decisions that exist while it does not cause significant harm.

[korkor]

In order to regulate digital currencies in relations to cryptocurrencies, the government must and should be the majority holders of all cryptocurrencies. With this, they can control the amount of a particular coin circulating. They can determine the market price of the coin at a particular time and period. IF the government can achieve this, they can regulate the crypto market and world.

[April Ford]

Crypto is global and decentralised, but people who use it aren't. Regulating crypto means that you write laws on how people have to pay taxes on it, and what they need to do if they want to create it, trade it, and advertise it.
While there are well known examples of crypto that were started anonymously, nowadays most of the projects have founders known by name, and these founders will have to stay in line with the law, or move to a country that doesn't have such laws. Also, for exchanges, this means that if you're running an exchange, or an interface to a decentralised exchange, you will need to apply the laws, or move away from that country.

[The Scorpion]

wow  thank you all for grate responses i have leaned lot from this.i thank all for helpful responses.

[BrewMaster]

In order to regulate digital currencies in relations to cryptocurrencies, the government must and should be the majority holders of all cryptocurrencies. With this, they can control the amount of a particular coin circulating. They can determine the market price of the coin at a particular time and period. IF the government can achieve this, they can regulate the crypto market and world.

you don't regulate things by having a stake in them! it is like saying for the government to regulate companies like Apple, Microsoft, Google, Dell,... they have to own majority of the shares of these companies to control them! which is obviously not the case. 
in a society when the law maker makes a new law the law enforcement enforces it. they don't need stakes to enforce it. and cryptocurrencies and their regulation doesn't have to be any different than regulating a company.

[bitterdog]

Though it’s easy to see why governments would want to regulate the movement of digital currencies, the reality of doing so is much harder. A lot of wallets have no identification to them and rest on a server in a third party country. In the case of offline wallets in devices such as the Ledger Nano, they’re not connected to any network.so is it possible to regulate ?

i think its almost impossible for the government to regulate digital currency because the initial goal of digital currency is to make another financial system that is simply free and without needing the third party. So, i think it will be impossible for the government to regulate it.

[toolsydas]

As demand for cryptocurrency grows, global regulators are divided on how to keep up. Most digital currencies are not backed by any central government, meaning each country has different standards. Every seemingly small regulation announcement has driven the price of bitcoin and other cryptocurrencies in 2018. I think that governments never will be able to fully regulate the digital currencies.

[fianaindriati]

I think the government can adjust the digital money. The government will introduce strict regulations for the development of digital money. Some governments only allow quality coins to operate.

Hopefully it can, adjust the development of the times that are currently changing every time. especially receiving digital currencies that have been circulating throughout the world

[ESCN]

Regulations on cryptocurrency is not possible especially decentralized one like bitcoin,and other altcoins,government cant..

[tegarp90]

Though it’s easy to see why governments would want to regulate the movement of digital currencies, the reality of doing so is much harder. A lot of wallets have no identification to them and rest on a server in a third party country. In the case of offline wallets in devices such as the Ledger Nano, they’re not connected to any network.so is it possible to regulate ?

I think that's almost impossible, because the decentralization of cryptocurrency that make people who owns cryptocurrency are undetectable.
The ease of wallet creation will make the regulation hard to apply.

[kalstarzz]

Though it’s easy to see why governments would want to regulate the movement of digital currencies, the reality of doing so is much harder. A lot of wallets have no identification to them and rest on a server in a third party country. In the case of offline wallets in devices such as the Ledger Nano, they’re not connected to any network.so is it possible to regulate ?

I think that could happen, the government can work with existing exchanges. from there the government can trace crypto asset owners.

[pixie85]

Regulations on cryptocurrency is not possible especially decentralized one like bitcoin,and other altcoins,government cant..

It IS possible. The weakest point of cryptocurrencies is the need for fiat money to buy it. Since you can regulate the flow of fiat money you can also regulate the exchanges and with them any cryptocurrency that you want. It doesn't matter that it's decentralized. If you can't buy it it's dead. Mining isn't enough to sustain growth.

[Stephen.88]

Some governments only allow quality co-operation. Making such changes can simply destroy the whole concept of electronic money. Most of us have submitted regulations to the KYC that we have implemented. And although sometimes it feels that KYC goes beyond what is really needed, it feels like we have no real choice because it was mandated by the government against the trading floors if they want to continue to operate.

[mika1977]

Cryptocurrencies themselves, they can adjust not can, because they have no single center. They will be able to regulate only their exchange for Fiat