Cryptocurrency Independence Under Threat As Regulation Encroaches

Cryptocurrency Independence Under Threat As Regulation Encroaches

For governments, cryptocurrency is becoming too mainstream to ignore and too chaotic to neglect. Across the world, government agencies are targeting crypto investors not only with taxes but mandatory registration and full disclosure rules. This new wave of regulation poses a contradiction in that some of cryptocurrencys strongest traits have always been privacy and autonomy.

State Regulation of Crypto Raises Questions

Australias registration of 246 cryptocurrency exchanges between April 2018 and January 2019, hailed by observers and the exchanges themselves as boosting the credibility of the industry, likely indicates the direction that virtual currencies are taking in relation to regulation throughout the world.

Some industry players speak approvingly of regulatory encroachment as a step towards respectability. State regulation increasingly appears to be the price the crypto community will have to pay for assimilation into the mainstream economy, raising existential questions about the direction of the industry.

Cryptocurrency Independence Under Threat As Regulation Encroaches

Whereas early cryptocurrency visionaries sought to operate a skeptical remove away from authority, emphasizing freedom, autonomy and democracy, some new movers are welcoming regulation as a solution to the trust problems that have affected the industry.

Some of the regions that have weaponized the law books to meter aspects of virtual currencies include Malaysia, Australia, Japan, the EU and the U.S. As authorities across the world co-opt cryptos Escobar season and drag it into the mainstream, it is interesting to observe just how much of what made crypto so appealing will remain.

The root problem with conventional currency is all the trust thats required to make it work, Satoshi Nakamoto wrote in his revolutionary proposition ten years ago. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts, whereas cryptocurrency is based on crypto proof rather than trust.

Regulation Rolls out With Benign Offers

Regulation is rolling out with the innocuous sounding promise of support for innovation, but it is not clear how heavily government whims will impose upon investors and exchanges going forward. Individuals looking to operate in an insular system, away from central bank and state oversight, are increasingly confronted with new top-down demands for the industry which include the closure of firms and freezing accounts.

Although Japan has traditionally been a liberal environment for crypto, it has been tightening regulation since the Coincheck hack early last year. The heist of $530 million sen ...

Read full story on Bitcoin News

Tags: Regulation, Cryptography, Cryptocurrency, South Korea, Financial Services Agency, Satoshi Nakamoto