author avatar
Jay Crypto

Blogger

Last updated Jul 27, 2022 at 6:59 PM

Posted Jul 6, 2022 at 4:00 AM

article image

Digital currencies came into the limelight in 2009 and have since evolved to become the foundation of various technological innovations with immense economic implications. The immemorial human need to pursue commercial transactions has been transformed so thoroughly that, frankly, it might be irrational to bind the new digital currencies with traditional rules.   A new set of pristine and intentional rules is required for the crypto revolution.

What is cryptocurrency?

Cryptocurrencies are tradable digital currencies built on blockchain technology that have gained wide acceptance amongst traders and investors globally –  and by all indications they are here to stay. The rapid increase in the value of some coins has been especially astonishing, and some cryptocurrencies are already having a significant impact in countries where cryptocurrencies are recognized. In March 2022, Bitcoin’s price was above USD 40,000. A holistic view of crypto regulation is essential.

Countries with crypto regulations

As crypto has spread across borders, so too varying regulations have emerged across the world. Some countries still frown on digital currencies, but more have welcomed the technology with open arms. Countries such as the United States, the United Kingdom, China, and Thailand have put different measures in place to regulate cryptocurrency. In contrast, in September 2021 El Salvador adopted crypto as legal tender for day-to-day transactions.

Why cryptocurrency needs to be regulated

Crypto regulation is a perpetual subject of discussion; the market widens every day with the introduction of new cryptos.  However, the volatility of these cryptos due to a lack of centralised control measures, as well as the opportunities for unscrupulous persons to engage in money laundering and online fraud, have raised concerns.

The economic benefits of Crypto regulation

Certainly,  orderliness can only be achieved by laws which will benefit not only individuals but also the economy. Cryptocurrency regulation benefits are endless; some of the economic benefits include the following :

1. Market stability: Undoubtedly, investments boost the economy, but not when the currency is extremely volatile. Market manipulation and domination by a set of people might lead to reduced investment and economic development.

2. Income generation: Regulation of crypto trading and transactions can be achieved by limiting the frequency and volume of crypto that people handle at a particular time. Taxation on transactions regulates this factor, and also generates revenue.

3. Technological innovations: Regulatory moves on crypto will cushion the different risks attached to its adoption and use, thereby encouraging innovations around digital currencies. Technology helps in building a smart economy.

4. Job opportunities: Crypto adoption has led to new industries and jobs; its regulation will only fuel more adoption and job production. An increase in job opportunities is tantamount to increased economic gains.

Crypto policies and regulation are still under constant review by different jurisdictions where crypto has been adopted. However, it is undebatable that crypto regulation comes with some benefits.

Share on

  • Copy link

Tags