how governments can regulate digital currencies?

[The Scorpion]

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 ?

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[OmegaStarScream]

The regulations are clearly impossible to touch open source and decentralized projects. Centralized exchanges in the other hand are easy to regulate because of KYC/AML.

[Uberse]

They can be regulated by proxy by licensing and taxing miners' electrical consumption, and crypto exchanges that transmit fiat. But bitcoin, ether, litecoin and most other protocols (although not Ripple's XRP, which is a true token created administratively) just hash data using known algorithms (such as SHA-256). Use of such algorithms cannot be restricted in nations with any kind of rule of law. (Only poverty can do that, such as is found in Cuba and N. Korea.) Nor can the digital products of such algorithms (bitcoins, ethers, litecoins) be banned for the purposes of commerce. Not being fiat, to use such products to obtain goods and services is to engage in literal trade, or barter. The only regulatory potential there relates to tax enforcement, not suppression.

[southafricadude]

they can try to regulate the exchanges and the users of them. Store your bitcoin in your own secure wallet anyway, not on an exchange. If you want to cash out bitcoin you dont have to do it on an exchange, although it does make it easy. When you withdraw from an exchange to your bank account, you will have to explain the income, and that is also where regulations might get you.

[Dudeperfect]

To be honest, there is no practical way to regulate the flow of cryptocurrencies. The best way for the government is to allow users to disclose their crypto transactions and they have the option to monitor it through the domestic crypto exchanges (with KYC). Even though some governments are trying to find the way to track the crypto transactions and ownership of it but I doubt, how full proof it is going to be in the long run.

[pragna]

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 so, it is very difficult to regulate by any government to its inhabitants who uses digital currencies. Actually it will fully depends on peoples honesty i think. If they think that they will do their work legally they may follow government rules as a result they both may gainer legally.

[tanoe]

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 ?

Yes, the fact that regulating or making regulations for digital assets is not as easy as making regulations for asset owners in conventional banks. There are no tracks that can be used as a reference to tax on coins. The easiest regulation is to prohibit it as in some countries. Which indirectly kills the cryptocurrency.

[rodel caling]

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 true mate, i think that's reason bounty hunter requiring kyc registration to start study how to comtrol bitcoin as currency.
I think kyc is a trail process for implementing rules and regulations how to monitor and control this harder anonymous digital currency.

[figmentofmyass]

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 ?

they don't have the ability to affect transactions on the network. they can't physically stop people from using crypto, and they don't have jurisdiction outside their countries, where citizens are making cross-border transactions.

however, they can pass laws that affect users. they can make it illegal to use crypto (some countries have done so), although that's impossible to enforce and is mostly done as a deterrent. they can include traders and exchanges under anti-money laundering laws, forcing traders to provide ID and personal info to trade on centralized exchanges. they can (and do) analyze the blockchain for financial crime and tax purposes. and you can bet that your local tax agency wants a piece of your bitcoin profits, which you can hide in a private key, but not in your bank account after you sell at the exchange.

[becak mesin]

You're right. It is easy to say but so much harder to do. If it is easy to do government probably make and create the regulation about Crypto since many years ago. For that reasons, it needs a long time to make that regulation because the government should investigate and research first the movement of Crypto currency. The regulation should prevent and minimize the high risks or potential risks for the users pleasure and secure.

[umrohyuk]

It is not an easy way to do because government should do many ways to create and make regulation about crypto currency. Therefore, there are many country still investigate and research how the crypto currency system and how does it works. The government do not want to do it in hurry. Let the government doing the best for crypto currency.

[wizardcrypto]

regulation of cryptocurrency sound impossible but there are measures that taken by the Government that  can make it possible . the government controls everything. here are my fews tip on how cryptocurrency can be regulated successfully if the Government buy my ideology:
1.Clear up the tax situation
2.Regulate exchanges
3.Create a framework for ICOs
4.Let exchanges manage ICOs
5.Establish a working group of blockchain experts, economists and policy wonks
6.Don’t innovate yourself

[Fersec]

Yes, regarding bitcoin, there should be a regulation that regulates both from the government or from the Bank.

Some banks in the world state that bitcoin and other digital currencies are not legal currency or means of payment. People are urged to be careful of bitcoin and other digital currencies.

Not recognized as a legitimate currency or payment instrument, bitcoin can actually pose its own dangers. Bitcoin can be used as a means for financial criminals to practice money laundering.

Ironically, the auditor's money laundering practices cannot be detected by the Financial Transaction Reports and Analysis Center.

Bitcoin is currently a zone where law enforcement officials and financial auditors are also difficult to track and prove these criminal actions.

We must see some countries that accept bitcoin, one of which is the United States, where bitcoin is categorized as property for tax purposes. There is also Bitcoin seen as a commodity by CRA and this means the transaction is seen as a barter transaction and the income generated will be considered business income.

[tanzaholzmann]

no, the government cannot manage offline wallets from nano ledger and others, online and offline are contradictory and I am sure the government cannot regulate it.

[pooya87]

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 you need to go back and start learning the basics about bitcoin instead of only posting in your signature campaign and earning pennies! this is not how bitcoin works. there is no "server" for a bitcoin wallet and whether the wallet is a cold storage (offline or hardware) or a hot wallet (desktop connected to internet) doesn't change the fact for its identification! they both are doing the same as far as the network is concerned which is holding private keys and signing transactions with them.

[chrisnewsome]

The governments can regulate digital currencies through two process namely: creating/reforming laws on cryptocurrencies and the government's central bank. These processes are effective in regulating digital currencies that are flowing through the country.

[people12345]

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 ?

Yes they cannot regulate digital money because of the process which the wallet is having no identification to their server, they are not connected to any network but, i think they use  something new process that everyone can use it as a currency. Somehow, government should implement digital money as a new currency since we are living in this world where technology almost control all individual.

[franky1]

how do you regulate currencies.. the same way you regulate liquids and plants

you cant destroy the cannibis growth or the beer growth or its consumption.
the war on drugs and alcohol prohibition era proved that.

all that is done is outlawing or controlling the people and businesses. but thats IF agencies find whos selling or buying it.
but yea
blackmarkets, street dealers still happen
moonshiners, 'speakeasies' still happened

[Lauff]

in my opinion the government cannot regulate the crypto currency because we know that the crypto currency is currently still anonymous, the government can be regulated if all crypto currency users give their identity to the local government bank to be taxed

[Strufmbae]

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 ?

If governments can make regulation to crypto currency then for sure it will help a certain country, if we are going to calculate on how many times does crypto users buy and sell crypto then taxes will be a huge amount. Furthermore,  as far as i know as long as ledger is not connected then transfering of data or transacting to any address will not cost much expense if regulated.