Do Cryptocurrencies have a Future Amidst Regulatory Scrutiny over the Industry?
It was back in 2009 since the cryptocurrency industry had been around. However, the digital asset industry had not gained much attention and adoption in the recent years. Then came the year 2020 when the cryptocurrency industry blossomed and soon, it became the only entity to compete with Apple as per market valuation. Since late 2020, the cryptocurrency industry has been around and even the most common of people and investor are benefitting from it.
Now the industry has grown to a point where it has more than 100 million users actively performing trades through its platform. The industry has grown bigger and better for the entire world, and more institutions/investors are coming to the industry.
Are Regulators Supportive Towards Cryptocurrencies
While the cryptocurrency industry has observed great adoption and support from the investors, the regulatory authorities have picked the opposite side of it. Ever since the cryptocurrency industry has come into being, it has faced strong resistance from the regulatory authorities from most of the countries. There are several reasons why the regulatory authorities are against the very existence of cryptocurrencies. However, there are few that come on top of the list when it comes to the type of resistance cryptocurrencies face from regulators:
Even at present, majority of the regulatory authorities are concerned about the volatility of cryptocurrencies. It is true that the cryptocurrencies are extremely volatile. One moment, they might be experiencing an all-time high and the next, they would be experiencing an all-time low. The regulators are concerned about this and question the very physical existence of the cryptocurrencies. As per regulators, the cryptocurrencies do not have a physical existence, which is why they would never become as stable as other investment securities. It is one of the reasons why the cryptocurrency industry is finding it difficult to be accepted by the regulators.
The regulatory authorities would always prefer traditional financial institutions over cryptocurrencies. This is mainly because through traditional financial institutions, regulators can always gain access to any person’s account and their personal/financial information. This way, the authorities as well as the centralized entities would always have access to personal and financial information of users. On the other hand, decentralization offers complete privacy and involvement from not a single intermediary. While centralization gives control over your data and information to regulators and financial institutions. Decentralization lets users be the owner of their own privacy and information.
When it comes to cryptocurrencies, the most sensitive and critical part for the regulators is money laundering. Over time, as the cryptocurrency industry has become widely adopted and millions of new users have joined the platform, the transaction volumes have also increased in the industry. The high number of transactions plus the decentralization of the industry makes it a perfect pick for the money launderers to do their bad deeds.
So far, regulatory authorities from around the world such as South Korea, Japan, and China have started scrutinizing the industry. So far, they have established that hundreds of billions worth of funds have been moved abroad with the help of cryptocurrencies. However, as more than 90% of the crypto-verse is unregulated, such activities go unnoticed. This is the reason why the regulatory authorities are opposing the cryptocurrency industry entirely.
Is Cryptocurrency Industry Going to Survive?
Although majority of the regulatory authorities are still on the opposing side of cryptocurrencies, the industry is still experiencing an upward trend. With time, the regulatory authorities have come to understand that there is no point in trying getting rid of the cryptocurrency industry. While the regulators are scrutinizing the cryptocurrency industry, they are doing this to streamline the platform instead of getting rid of it.
Over time, the cryptocurrency industry and the regulators have started coming on the same page and grow a level of understanding. One of the biggest examples of such behavior is the United States of America. Until 2020, the US Administration and the regulators were fully against cryptocurrencies. Now, the situation is changing and more crypto-business is coming to the country.