I know, I know. The notoriously untrustworthy lawmakers want to stop everyone from transacting in digital currencies outside of their purview. They want to ruin our good time in the decentralized world of crypto. Shouldn’t we be deathly afraid of legislation as a result?
Professional investors managing trillions of dollars may disagree; in fact, the lack of a positive regulatory framework could be the only thing holding back billions of capital from entering into cryptocurrency markets.
No one wants to see regulators overstep their bounds, but we can leave that job to the big boys who no doubt have armies of lobbyists due to their overwhelmingly deep pockets.
Regulation could be good for bitcoin, or indeed any other major cryptocurrency.
Chairman of Commodity Futures Trading Commission (CFTC), Rostin Behnam, said recently that “Bitcoin might double in price if there’s a CFTC-regulated market.”
This is an organization currently competing with the U.S. Securities and Exchange Commission (SEC) for control of the crypto space as both claim jurisdiction. It’s a power struggle which could define cryptocurrencies in the near-future.
Whichever one wins does not matter so much as the intentions of the eventual regulator. Certainly, the SEC has been more fiery in its rhetoric in claiming all Ethereum transactions legally occur in the USA. A softening of this stance is likely, as stringent regulations could drive cryptocurrencies underground, or more to the point, into the arms of rogue states.
At present, cryptocurrency markets are volatile. Institutional investors do not like unpredictable, volatile markets.
Having regulatory clarity moreover will actually increase adoption in all likelihood. The governments of the world want to know where consumers stand in the nascent industry: are they protected, safe and not about to get scammed?
Cryptocurrency services are being rolled out by some of the world’s largest financial institutions to select clients, while investors managing trillions in assets are projecting a huge crypto price rebound.
As long as the ideals for cryptocurrencies aren’t completely trashed, so we retain a semblance of decentralization alongside financial empowerment, positive regulation should be welcomed. It could trigger the domino effect by which we see crypto become a mainstay of mainstream life.
In such a world, regulation is a necessity: there is too much exposure to risk for a large proportion of users for this to be otherwise. Instead of the death knell for cryptocurrencies, it could be the making of the industry.
