I predict stricter regulations for bitcoin and the cryptospace for 2021-2024

[bbc.reporter]

Despite Trump’s affiliation with the Republicans, his politics is not conservative and his governance style was more laissez faire than anything else. However, the Democrats will take over. Democrats are left leaning politicians. This might imply more government intervention, tighter regulations and less personal freedom for the people.

Bitcoin and the cryptospace might be its biggest victim, I reckon.



The Biden administration is tapping two financial regulators from the Obama administration to oversee key departments that had loosened their grip of the industry under President Trump, according to two people with knowledge of the plans.

Gary Gensler, who led the Commodity Futures Trading Commission during the Obama administration from 2009 to 2014, will be President-elect Joseph R. Biden Jr.’s nominee to lead the Securities and Exchange Commission, these people said. Also, Rohit Chopra, the former assistant director of the Consumer Financial Protection Bureau, has been chosen to run that agency.

Mr. Gensler is a veteran regulator who played a central role in bringing the big banks to heel in the aftermath of the 2008 financial crisis, giving new teeth to a watchdog agency. Lately, as an academic, he has been schooling himself on digital currencies like Bitcoin that have become an important part of the S.E.C.’s regulatory mandate. He had been leading the transition team advising Mr. Biden on financial regulatory oversight.

Mr. Gensler, 63, will step into an agency that has faced criticism as being too lenient in pursuing high-profile cases involving Wall Street and corporate America.

“I think he comes in with more of a well developed enforcement philosophy given the work he did at the C.F.T.C., and just probably a bit more of an aggressive enforcement bent than the prior chair,” said Matt Solomon, the former chief litigation counsel at the S.E.C. and a partner at the law firm Cleary Gottlieb.

Read in full https://www.nytimes.com/2021/01/17/business/gary-gensler-sec-rohit-chopra-cfpb.html

[OcTradism]

Trump, Biden or any future presidency will have stricter regulations on bitcoin and cryptocurrency. They have to do so as they don't want to let cryptocurrencies easily beat their systems. It is what they must do to prevent their system collapse or simply to prolong the time it will happen. Their systems have big flaws and are failures but they have to protect theirs.

How many years since the Genesis block? More than 10 years.
How many times the bitcoin has witnessed stricter regulations? I don't know, but it is a lot. The price is on rise despite of regulations.

Prepare for stricter regulations but please be positive.

[death69]

Personally, Im not a US citizen so I dont really care about stricter regulations. And even if my government decides to make more regulations on crypto users and crypto assets, it will not bother me at all since bitcoin is decentralized coin. How can you put tax or put new rules on a virtual object which you can't even control it.

Though, more regulations mean less users. Hope that it will not happen like i think

[pooya87]

That is an excellent news.

The more regulation governments push on the cryptocurrency market and the more strict they are, the more developers are going to work on decentralized solutions for people to use. Basically it speeds up the process and it pushes a lot more people towards these alternative solutions which means instead of taking years for something like a DEX or a Decentralized Marketplace, etc to complete they could take 6 months.

[Wenbing]

Well, i have seen that the future of crypto industry will attract regulations from the government.  the reason why there are less regulation is due to the fact that the industry is still very young.

But, here is what i want to know. How will the government regulates bitcoin and other cryptocurrencies that are decentralized?

[20kevin20]

It's both good and bad news, depending on how you look at it and on how the new regulations sound like. If they're pushing out regualtions that make it a pain in the ass to hold cryptos, then it's obviously bad news but at the same time it'd lead to what @pooya87 mentioned.

But if stricter regulations limit the legal use of cryptos and add new laws we have never had before, then mass adoption could come even closer to us than ever before as people might feel safer to invest in a regulated market than in a grey zone.

For me, personally, it has no effect upon the future of cryptos. People will always find a way to make this space better and I'm afraid it's going to be too late for the Biden administration to make harsh changes because more and more people are moving to decentralized and open-source solutions as they find out this is the freedom we all should really have!

[Coyster]

But, here is what i want to know. How will the government regulates bitcoin and other cryptocurrencies that are decentralized?

This is a very interesting question, I read an article that suggests government is prolly going to require every crypto user to carry out transactions only on an exchange, but whichever way you look at it that's not going to be possible, crypto user will still make use of their personal wallets and carry out transactions via P2p, which the government cannot track or regulate.

Having said that, this makes me draw a conclusion that if stricter regulations are to be implemented, the government is going to work with exchanges, cause this exchanges are registered with the government and they hold their users data and information, and like it has happened on numerous occasions, they'll not hesitate to give that info to the government, if they request for it

[Wexnident]

And I'd be glad to have them. At the very least, the government is acknowledging it, and this could (rather, most probably would) increase the knowledge of the populace with regards to cryptocurrency. At the very least, they simply wouldn't be ignorant of them, and well, hopefully, would have a shield against possible scams and the like (that the government would take notice of anyway).

But, here is what i want to know. How will the government regulates bitcoin and other cryptocurrencies that are decentralized?

I guess it'd be ruling that doesn't really attack the core of what decentralized crypto is, but still possibly regulate it in an advantageous way for them. Quite vague, yes, but it can't be helped, crypto itself is quite young after all, it isn't that odd that rules and regulations have possible holes here and there.

[NeuroticFish]

That is an excellent news.

The more regulation governments push on the cryptocurrency market and the more strict they are, the more developers are going to work on decentralized solutions

That's correct.
Also the more the regulations, the more credible and accessible they make crypto for the average Joe (who will use regulated/centralized tools at first and maybe decentralized later).
This means that "Bitcoin is illegal money" narrative will not catch any longer and the masses will get to discover it.

So I cannot agree more. It's an excellent news.

[dothebeats]

They have to impose stricter regulations, otherwise more and more people would lose trust and faith in the regular banking system and traditional asset investment, which nets the government a lot of money through tax proceeds and whatnot. No matter the political affiliation or ideology of these leaders, they will have to do it as it is to even the ground between traditional assets/investments and cryptocurrencies. Also by doing this, they will net more revenues from taxes, so overall a 'good' thing so long as the new administration isn't corrupt and focuses their programs on the right thing.

[adzino]

Personally, Im not a US citizen so I dont really care about stricter regulations.

It will affect other countries if US decides to put strict regulation. More strict regulation means more restriction "free movement" between US and rest of the world. Hence, others might try to avoid anything related to crypto currencies that is associated with the US. Or your governments might also follow the same move.

How can you put tax or put new rules on a virtual object which you can't even control it.

You can't. As long as you aren't involved with fiat currency, there is nothing they can do. But, if you convert them to fiat anytime, you will be subject to a tax. This also involves making purchases through vendors that don't do direct "P2P" transactions. Lets say a site uses coingate to accept bitcoin as payment method. Now when you purchase anything from that site, you pay coingate to convert your coins to fiat and pay the merchant. Hence you have created a taxable event. Laws differ from country to country. Know your laws.

[squatter]

Despite Trump’s affiliation with the Republicans, his politics is not conservative and his governance style was more laissez faire than anything else. However, the Democrats will take over. Democrats are left leaning politicians. This might imply more government intervention, tighter regulations and less personal freedom for the people.

I wouldn't say the Trump administration has been crypto-friendly. I'm of the opinion that the FATF is a Treasury Department puppet and that the Travel Rule published in 2019 was their making.

The Trump administration is now pushing through last minute proposals to require businesses to perform AML/KYC on any $250 cross-border transaction, and to require them to perform due diligence on non-custodial wallets they transact with.

These are extremely burdensome, far-reaching regulations that have serious privacy implications for Americans who use centralized Bitcoin services.

Now that I've said that, yes -- things are going to get worse under Biden.

[Kakmakr]

Biden and his regulators must look at the mistakes of the past... let's just look at the Prohibition in the United States, a nationwide constitutional ban on the production, importation, transportation, and sale of alcoholic beverages from 1920 to 1933. What happened when they did that? Answer : People went underground and they did this illegally and the result was a massive drop in the taxes... because the illegal trade did not pay taxes. 

They can regulate all they want and some people even welcome it, but once they start banning something... people find ways to bypass it and the government suffer the most. 

[meanwords]

Though, more regulations mean less users. Hope that it will not happen like i think

It's actually the opposite. People would flock Bitcoin because of this regulations. The fact that they are going to make a stricter regulations means they are actually acknowledging Bitcoin and that's a terrific news to all. Government acknowledging Bitcoin is a go signal to consider for people who thinks Bitcoin as something bad.

[Lucius]

I won't be surprised with anything that will come from the US kitchen, no matter what it was about - even when it comes to cryptocurrencies. What I see as the biggest problem is the fact that Bitcoin has become increasingly dependent on just one country, on one crypto exchange or one man’s vision of how things should look (it doesn’t matter his name was Trump or Biden). Everything that happens there (good or bad) will affect the whole world, and especially those countries that the US keeps in a small pocket and that unquestioningly carry out all orders.

Biden and his regulators must look at the mistakes of the past... let's just look at the Prohibition in the United States, a nationwide constitutional ban on the production, importation, transportation, and sale of alcoholic beverages from 1920 to 1933. What happened when they did that? Answer : People went underground and they did this illegally and the result was a massive drop in the taxes... because the illegal trade did not pay taxes. 

They can regulate all they want and some people even welcome it, but once they start banning something... people find ways to bypass it and the government suffer the most. 

It’s not a very good comparison, alcohol is something people have been using for thousands of years, and you don’t need to be overly intelligent to produce it, much less to use it. I don't know how much the authorities lost then because of the alcohol ban, but today the state treasury is filled with about $10 billion a year from alcohol taxes - and it would be interesting to know how much taxes are collected on everything related to cryptocurrencies.

Of course a total ban would not literally kill BTC - but imagine all those thousands of crypto ATMs that would have to be removed, Coinbase and Grayscale that would have to stop doing business and all those who have some assets in crypto would find themselves in a pretty difficult situation.

[maculeth]

of course if what is discussed is the strictness of the government towards its people. As we can see in North Korea and China, the tightness of the government towards its people, especially in terms of privacy, will make the government take a policy against crypto activities and may limit it.

[davis196]

That is an excellent news.

The more regulation governments push on the cryptocurrency market and the more strict they are, the more developers are going to work on decentralized solutions for people to use. Basically it speeds up the process and it pushes a lot more people towards these alternative solutions which means instead of taking years for something like a DEX or a Decentralized Marketplace, etc to complete they could take 6 months.

Yes,but more regulations over the centralized exchanges means that decentralized exchanges will have to be regulated as well,or declared illegal.The government officials aren't that stupid.They know that imposing more regulations would mean more people moving into non-regulated crypto exchange platforms,so the officials will have to find a way to regulate the DEX marketplaces.
KYC policies like ID verification might not be sufficient for the "big government" anymore.
Be ready for mandatory address verification.

[AicecreaME]

But, here is what i want to know. How will the government regulates bitcoin and other cryptocurrencies that are decentralized?

The Government could easily make a law regarding about this, especially if they are really desperate to regulate it because it dominates the fiat, and it could be easily become a law since the majority of the community doesn't care about Bitcoin and other cryptocurrencies because they are solid fiat supporters and users, thus when it happens, we, Bitcoin Enthusiasts would have headaches about such law when it will exist in the future.

But I think huge influencers and huge companies that believes in Bitcoin will opposed and will do their best to convince the Government not to regulate cryptocurrency.

[avikz]

Well, this is not only for US but for the other countries as well! It is an established fact that bitcoin and other cryptocurrencies are actively being used for many illegal activities around the world. Now after the recent price surge bitcoin was able to catch government's attention so we can expect a more streamlined regulations to put in place so that government can maximize revenue and lower the illegal usage. US may take a front row seat here!

[EdgeoftheContinent]

That could be true, I don't really expect many US politicians to be openly friendly to bitcoin or cryptocurrencies. More regulations or more pushback from the federal government might not happen though as it would seem to bring legitimacy to an alternative option rather than letting it fly under the radar.