Blockchain

Why Regulations Are Important When We Talk Crypto and Investments?

crypto regulations

The stock market has been regulated for a long time, and about 50 percent of Americans own stock of some kind. However, only 2 percent of them own Bitcoin or another cryptocurrency. While everyone is intrigued by it, they aren’t going to buy it because of the price volatility. On top of that, it isn’t used as legal tender in many areas, and it isn’t regulated, so it’s easier for it to get stolen or lost.

Binary Asset Ownership:

Regulations, such as the travel rule, are going to divide crypto assets into unregulated and regulated versions. When you tie the real-world identities of the cryptocurrency owners to the assets running through the circuit, the crypto industry is going to get cleaned up.

Regulators and exchanges can identify money laundering through virtual currency and isolate it easily. It’s going to reduce the amount of crime out there, and the stakeholders can trace their cryptocurrency origins with verified and real-world identities on the blockchain.

Really, this is essential because the bad guys are going to move underground and aren’t going to be able to move stolen money or fund terrorist groups.

On top of that, many people still misbelieve that cryptocurrency is only used for illegal activities. For crypto to take control and become just like regular currency, it must shake that misconception.

Easier to Understand:

Right now, it’s hard to find crypto-friendly banks because it had always been uncertain of what these coins were going to do and if they were legal to use as tender. 

When it is regulated, financial institutions can classify various assets and make sure that they are legal to use and offer. That way, crypto-friendly banks aren’t going to have any risks, as long as they’re meeting those regulations and rules in place. 

While it is still a long way off for banks to offer cryptocurrencies and options, there is no reason why you can’t find a securities trading platform to wish for. They are coming and soon. On top of that, you’re going to know that the crypto industry is regulated by top options like FINRA and the SEC.

More Institutions Invest:

Financial institutions are pretty much nonexistent on the blockchain (any of them). They aren’t designed for quick innovation and often have outdated systems. However, the confusion surrounding cryptocurrency doesn’t make it any easier. These institutions focus on what is legal and considered correct for them, and regulation is going to help with that.

more institutions invest

Once institutions create their own coins or tokens, things are going to progress and jump even higher. They may also allow you to transfer money right from your Bitcoin wallet to your bank and vice versa. With that, you may also go to the bank and have your money transferred to cryptocurrency or buy it directly from the bank.

Reduces Scams:

The crypto market has made a lot of people wealthy, and there’s no doubt about it. However, people are also losing a lot through scam ICOs and coins. Because the market is so unregulated, scammers can launch scam coins. They’re pumped into the market, and investors put in their money. However, then, the project owners go away and take the money, too! Investors have worthless tokens or codes that are delisted by the exchanges (if they make it there).

Cryptocurrency regulation throughout the world could help the market immensely. Regulations are going to ensure that new coins meet specific criteria. In a sense, people are putting their money into cryptos that are proven and safe.

When Might It Happen?

The government is working hard to regulate cryptocurrency, but it’s drawing a lot of backsplashes because those who use it don’t want it to happen. Most people use crypto because their identity is hidden. Therefore, to shed light on them is going to make them run away.

Most cryptocurrencies don’t want that to happen because their stock is going to go down when it does. However, they don’t realize that there is more potential here because of that. When crypto is straightened out, and it can’t be used illegally to hide money or use it to buy illegal things. 

While that image has slowly dissipated because Bitcoin rose in 2017, some people just worry too much about illegal operations. Therefore, if crypto exchanges and creators realized that, they might focus more on cleaning up their acts. That way, everyday people might jump on the bandwagon and add their money to the pool.

You may have kept up with the times to see that India and China both waged war against cryptocurrencies, making them illegal. Though it didn’t stick, and people broke the law to gain access to crypto, the idea is still the same.

If you put a negative tag on it, some people are never going to use it, even when it becomes the norm. Others are going to flock to it to be part of the “anti-government” movement surrounding it.

Regulating crypto now is going to do away with both. Though it’s going to take most people some time to get over the negativity surrounding crypto, it can happen. Those who flock to it because it was illegal are going to realize how good it is and be confident that it’s available and legal to use.

On top of that, it’s going to clean out the illegal users – those who use Bitcoin for sex trafficking and drug sales. While it isn’t going to prevent them from happening, it is going to cause an uproar in the illegal sector, so those people are going to look for other means.

Conclusion:

If you want regulations for cryptocurrency, it may still be a long way off (for the most part). However, INX has created the first-ever regulated trading platform. When you use it, you know your money is safe and that everything is legal.

This is a great tool to have, and you have analysis and other benefits from it. Though it isn’t live yet, now is the time to purchase your security tokens. That way, you have an “in” and are ready for the action to come.

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