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Cryptocurrency is something that has developed in a very recent time and is very popular amongst the people and enforcement agencies. It is a thing which is very recent and new and therefore lacks laws. However, in recent times enforcement agencies have been looking into the working of the cryptocurrency and are also working for the laws. There are some of the developed nations which already have laws for the regulation of cryptocurrency but there are a lot of nations that lack laws for the regulation of the cryptocurrency in the market.
Need of Regulation
The need for regulation is something that talks about the need for laws for the smooth working of the cryptocurrency. There are basically two concerns that pose the need for the laws. The 1st one is the flow of the currency from one country to another country because the internet is borderless and the 2nd one is the concern of the security attached with it. These two points of concern give rise to the need to regulate.
Although in the past few years a lot of work has been done on the same with the intention to regulate it and the people are looking it with the positive eyes as it is preferred a lot by the people as a form of investment because of its high return and when the people are getting a good return on the same, they will definitely need some kind of security to the asset purchased by them. On the other side when some money is flowing out of the economy by the citizens it is the duty of the government to keep a check on it and when a person is buying cryptocurrency out of the fiat currency the money is definitely flowing out of the hands of the people and sometimes going out of the country and in case there is no regulation this will be a major source of money laundering.
The 2nd concern is that there is a threat of security attached to everything on the internet and when the virtual currency is something present on the internet there can be chances that the hackers may conceal the important data from the personal computer and go for crypto mining.
There is no getting around the fact that cryptocurrencies have many flaws, most of the technical, which can be fixed as technology advances. However, can they survive excessive government control? The paradox is that every time a certain thing gains popularity, the government starts controlling it, making the idea of cryptocurrency more of a dream than a reality.
It is said that Bitcoin aims to replace the traditional currency and that transactional methods must be secure enough to prevent hackers from manipulating it yet simple enough for consumers to use. The regulation of it must also differ from other traditional currencies and at the same time make it more independent from its competitors. Cryptocurrencies face two major hurdles to overcome: removing the educational barrier and fighting the perception war, which tends to be negative at the moment. Many traders have started accepting cryptocurrency as a token of exchange, but the ratio is still very small compared to other fiat currencies. There is a need to upgrade digital infrastructure in developing countries, and the government should encourage capital expenditures for that purpose. In conclusion, we have to accept the fact that the world is changing our attitude toward many cryptocurrencies, which may positively impact how we live our lives.
Despite many countries moving towards regulating cryptocurrency the atmosphere remains dull generally. Many countries have opted for a conservative approach citing cryptocurrency might lead to an increase in terror funding and money laundering, however, countries that have good Anti-Terror funding laws and good ant money laundering laws have welcomed cryptocurrency. However, there are other countries that have opted for a wait and look approach. They are still not sure whether to regularize cryptocurrency or ban it altogether at once. However, banning it completely might not be a good decision as cryptocurrency has certain advantages which traditional fiat money doesn’t provide. Analyzing the role of encryption in blockchain is a trading platform for all cryptocurrency investors, providing an opportunity to invest in Bitcoin with ease.