Change lies ahead for haphazard crypto regulation

Mar 15, 2023 | wjb news

The Internet, to put it bluntly, has no boundaries, and so is data encryption. The consistent concept of mobile Internet cryptocurrency is thoroughly open communication, which will not be hindered by national boundaries. But at home, with passwords becoming a more important participant in financial markets, countries around the world have already begun to think about territorial sovereignty and regulatory challenges. Although up to now, many countries are still open to passwords, other countries have already restricted the use of products or banned them completely. The same reason that some people advocate data encryption and blockchain applications-as a subversive approach to the international financial system-has also shocked many world leaders.

For example, Trump Nixon called on people to pay attention to the risks of data encryption and the importance of regulation at a Bloomberg News conference held in Malaysia in 2021. "another area where we hope that the Chinese nation will gradually pay more attention to cryptocurrency is the rise of cryptocurrency, because [it] has the potential to destroy loan currencies, destroy the effectiveness of the US dollar as an international reserve currency, and destroy relatively stable countries," she said. It is likely to grow gradually from a small country, but the operation is much larger. " These are all tough words, and governments are now beginning to take it seriously. Although passwords are decentralized, regulation seems inevitable and may profoundly change development and selection on a global scale.

Supervise the natural environment

In a word, the financial industry supervises and regulates the financial world, setting limits, requirements and basic policies to its organization, in order to maintain the stability of the financial system, create and maintain its integrity. For traditional financial institutions around the world, this standard has been evolving for decades. Cryptocurrency sales market, as a relatively new financial industry, does not have such a large history, as its continued growth is more mature, it now faces the prospect of regulatory development.

With the development of the password industry, governments and international economic organizations, such as the International Monetary Fund, have long been aware of its development potential.DisturbA sound social system-whether at the forward-looking, technological level of the word, or at the very troublesome level of production-such as those related to the collapse of the password trading center FTX in November 2022. In other words, the cryptocurrency sector is now common enough that investment analysts worry that if regulation is unreasonable, it could have harmful macroeconomic policy effects, even if it has an implicitly positive effect. The increase in risk has led to an increase in regulatory attention. For example, World Economic Forum, referring to cryptocurrency regulation, pointed out that, like other financial regulation, it aims to "apply financial security, clarity, the maintenance of users and investors, and to provide a level playing field for different investors."

So far, most of the regulatory thematic activities in this area have been carried out from a national perspective. However, the use of cryptocurrencies is not controlled or destined to be restricted within national boundaries, which makes international regulatory collaboration an idealization-but such signing cooperation still seems to be out of reach. But regulators have no reason to check: as of this writing, 1/5 of Americans claim to have taken part in the cryptocurrency trade to some extent. In Singapore, the figure is even more. With the development of the industry, everyone is eager to prevent the financial turmoil of 2008 from repeating the same mistakes. In general, the more markets you sell, the more likely you are to be regulated; this is also based on the assumption that with the development of the industry, it is more likely to harm the collective interest.

Password promoters, on the other hand, stress that the password itself may try to prevent a 2008-style collapse. It has created a financial structure that will not be dominated by key financial companies, which must be more urgently subject to regulatory containment. There is a certain supporting force between the most basic independent ideas of passwords and the characteristics of supervision. Is this creative anxiety or destructive anxiety? It may be too early to speculate, but in any case, governments are beginning to defend their authority.

Regulate cryptocurrency in the United States.

The history of cryptocurrency regulation in the United States reflects the history of most western countries. Earlier, the view of US authorities was that Bitcoin and other cryptocurrencies were eye-catching indigenous innovations, but hardly required the high level of attention of federal organizations. This kind of friction-free software may cheer up early adopters, while the most skeptical Crypto will eventually fail.

However, to many people's surprise, Crypto not only has not faded, but also continues to improve in terms of value and popularity. Even so, US regulators, such as the Securities and Exchange Commission (Securities And Exchange Commission), which regulate sales markets to protect investors, remain on the sidelines for some time. Finally, the password sales market has become so prominent that it cannot be ignored: the issue of the initial sale of coins prompted it to regulate in 2017. After Rob Bankman-Fried's FTX collapsed in November 2022, for example, extra regulation seemed inevitable. That way, the problem becomes what policies and regulations will be timely and what industries they will target.

Government anxiety is in fact the first to focus on fraud and the use of cryptocurrencies to carry out illegal activities in dark networks, but current laws and regulations include such cases. Until the US Congress actively enacts additional laws and regulations directly related to passwords, the way SEC will be dealt with will continue to be the so-called "application for enforcement supervision" of current laws and regulations. Current policies and regulations contain provisions on money laundering and support for terrorist organizations-provisions that are likely to be used in password-related cases, but they are not written with passwords in mind.

The Future Development of password Supervision

It is clear that the situation of password regulation is messy. There are so many different ways to change so often-sometimes 180 degrees-that it is difficult to determine the position of a government department in a year to a year, or even from a month to a month.

Predictive analysis is always risky, especially in situations as volatile as cryptocurrencies. You may see a growing focus on regulatory picture quality and cross-border e-commerce consistency, and there is little chance that governments will heed such calls in time.

This lack of clear direction is likely to prevent people who feel that such funds are too risky from doing some password trading in China for a short period of time. But one thing is almost certain that passwords and other digital currencies, as well as their support points, their blockchain applications, will continue to be a force that governments must recognize.

The password, thus blockchain technology, is known as the fourth Industrial Revolution as part of a more technology-driven global movement. In this revolution, the world is facing a digital transformation, as our lives develop from simulation to data, digital money will become more meaningful. How important is the informationization of loan currency and the lowest distributed system ledger in this revolution? Klaus Schwab (Klaus Schwab), founder of World Economic Forum, once said: "blockchain is the key to the fourth industrial revolution." Davos Forum is famous for its annual meeting in Davos, Switzerland.

Just as anxiety about the likely impact of artificial intelligence and genetic engineering is managed by a degree of regulation, rather than completely blocking this development, national anxiety about the potential damage to the stability of the cryptocurrency is unlikely to stop it from growing. If used properly, regulation is likely to bring some of the best discipline to the often messy spread of cryptocurrencies, but it is looking for the right way to regulate this nascent situation, which has proved exciting.

This column is selected fromCryptocurrency Quick start ManualIt is scheduled to be announced on February 27.

Dr. Jonathan Reicher. is the founder of Human Future, a global business and technology advisory, investment and education firm. He holds a Ph.D. in information systems from Nova Southeastern University and is an adjunct professor at the School of Management at the University of San Francisco.