Deepika- Overcoming regulatory problems to change the digital asset industry for good
- The majority of crypto enthusiasts are working effortlessly to establish cryptocurrencies
Many people consider digital asset industry regulations a step in the right direction. It faces multiple problems due to its need for a well-defined structure. This has resulted in cryptocurrencies facing numerous difficulties in showcasing their efficiencies amid an explosion in growth. The domain of blockchain regulation is still in its infancy, even 15 years after its launch. Many aspects of the crypto regulatory framework need improvement or some tweaking to give them better exposure. Only some countries follow specific rules to change their crypto regulations, as different problems must be overcome. The decentralization feature has significantly influenced the regulatory framework defined in the crypto space.
How Are Governments Playing A Significant Role In Cryptocurrency Regulations?
Even though investors or market participants are known to impact crypto regulations significantly, the government has an equally important, if not bigger, role in cryptocurrency regulations. The investors are known for working as whales across the crypto market due to the buying power they possess within themselves. Being a whale, an investor can manipulate the direction of a cryptocurrency as one of its major holders. In these situations, small market participants face a major loss due to not being at the same level as whales.
For instance, there is Dogecoin, which is entirely manipulated by prominent personalities like Elon Musk. Being a multi-billionaire, Elon Musk can drive the price of Dogecoin upwards or downwards, depending on his comments. Meanwhile, the government is just a little behind investors, although far behind the control exerted over fiat currency.
Cryptocurrencies might function through a decentralized mechanism, but essential compliance must be emphasized in countries’ legislation. Some countries, like El Salvador, Switzerland, and Denmark, are heavily invested in the potential of cryptocurrencies. At the same time, countries like China are trying their best to put worldwide restrictions on cryptocurrencies.
Future Of Cryptocurrency Regulations
People across the crypto world have different opinions regarding the regulations being implemented. Cryptocurrencies have continued to maintain anonymity, which stricter regulations might threaten. Here are a few ways some companies will respond to digital asset regulation in 2024.
- Shutting off regulatory trends
Ignoring the regulatory trends spread across the market is one of the first ways the crypto space shuts off regulations. In most cases, it is mainly disadvantageous to them, as the government could impose monetary actions at any time. Thereby showing that not a single entity is bigger than the government of a country.
- Creating self-regulatory bodies
Yet another popular method used by crypto market participants is building their own regulatory bodies. One of those common examples is FINRA in the US, which is fighting regulations instead of raising them.
Conclusion
People across the crypto space are increasingly confident about putting a regulatory body in place and subjecting cryptocurrencies to restrictions. With a well-structured regulatory framework, it is easier for cryptocurrencies to reach their goal. They will get mass adoption once investors are convinced of the safety of the cryptocurrency market.
