Governments are finding cryptocurrency too mainstream and chaotic to ignore. Government agencies around the globe are targeting crypto investors with taxes, mandatory registration, and full disclosure rules. This new wave is contradictory because privacy and autonomy have been the strongest characteristics of cryptocurrency.
Questions about State Regulation of Crypto Raises
The registration by Australia of 246 cryptocurrency exchanges in April 2018 and January 2019 was praised by observers and exchanges as an indication of the direction virtual currencies are heading with regard to regulation around the globe.
Industry players view regulatory encroachment positively as a step toward respectability. The price that the crypto community will pay to become part of the mainstream economy is becoming more apparent, raising existential questions about its future direction.
Regulations threaten Cryptocurrency Independence on Shelter Humanity
While early cryptocurrency visionaries tried to avoid authority and emphasized freedom, autonomy, democracy, many new movers welcome regulation to address the trust issues that have plagued the industry.
Malaysia, Australia and Japan are just a few of the countries that have used the law to measure the virtual currency’s aspects. It will be interesting to see how much of what made cryptocurrency so attractive continue to be incorporated into mainstream law.
Satoshi Nakamoto’s revolutionary proposal ten years ago stated that the root problem of conventional currency was all the trust required to make it work. Banks cannot be trusted to keep our money safe and electronically transfer it. However, they loan it out in credit bubbles with only a small fraction of reserve. They must be trusted with our privacy and trust them to not let identity thieves drain accounts.” Cryptocurrency is based on trust rather than trust.
Regulators are rewarded with benign offers
While regulation is being introduced with the seemingly innocent promise of innovation support, it is unclear how much government control will be placed on investors and exchanges in the future. Individuals who want to work in an isolated system that is not subject to central bank or state supervision are being increasingly faced with top-down demands from the industry, including the closing of businesses and the freezing of accounts.
Japan is a country that has always been open to crypto. However, the Coincheck hack has forced it to tighten its regulations. Japan was hit hard by the $530 million heist, which prompted it to increase its regulatory burden and require exchanges to register with the Financial Services Agency (FSA).
South Korea bans anonymous accounts from cryptocurrency trading. It also requires banks to report on accounts that are held by digital asset exchanges. South East Asian countries have also banned financial institutions from trading on bitcoin futures.