Out of all the talk that has surrounded digital currencies since they first entered the scene, most has been about how to get them and use them. People were, understandably, most concerned with obtaining this new type of money especially when it started to shatter previous value records. It is normal for humans to want to have what is currently the most desirable and sought after, but what about the rest of the features that cryptos have brought to the table? The IT and financial markets have benefited from them in numerous ways and the whole world is different since they became a thing. However, mining and spending are still two of the most popular topics. Newcomers and beginner traders/investors are overly concerned with making more and with trading at the times. Nobody is talking about one of the most important sides of the whole story, which is of course the regulation of cryptos.
Regulating the Unregulated
Right now, and basically for the last 13 or so years, cryptocurrencies have been regulated differently in different parts of the world. Basically every country has its own understanding on the matter, meaning they all have unique sets of laws and regulations regarding the use, the ownership, and anything else regarding virtual currencies. Some countries ban most of the things, others are as open as they can be and allow the citizens all the freedom they require. But can cryptocurrencies actually be regulated? What would that even imply, and should it even be a topic of conversation? If you are interested in this, and you definitely should be, make sure to keep reading this article. What is more, for additional information on all things cryptocurrency check out https://bitcoin-equaliser.net/.
What Having Regulations Means
When something is regulated, it means there is someone or something that enforces laws, regulations, and guidelines on basically anything about that thing. When an individual, or more commonly a body or an institution is in charge of how something is to be used, applied, or distributed there is usually a lot of setbacks, delays, paperwork, and overall bureaucracy. The administrative procedures that need to happen for every little thing along the way drag things on, restrict its use and widespread, and most importantly, they allow that individual or institution to benefit from it all in some way.
The usual bodies, institutions, and individuals that regulate things in the world are the good old fashioned central banks, politicians and bank owners, and governments. When it comes to traditional money, also called fiat currencies, those would be the ones controlling and regulating everything. When a citizen wants to open a bank account they have to give most of their personal information to the bank. Whenever they make a transaction, the bank tracks it and documents it. The government decides when new money is being printed, what the prices are going to be, and anything else that can be considered a part of economy and finances.
Applicable to Cryptos?
When cryptocurrencies first appeared, the creators promised that things would be different than what people are used to with the usual money. First of all, the nature of crypto and the networks they exist on implies that nobody controls them in the aforementioned sense. This means there are no regulations of that sort since there is no central governing body that overlooks what goes on and takes a small percentage of every single transaction. Nobody is getting rich from cryptos while only providing the infrastructure. There are no regulations, it is all in the hands of the users. Even the platforms that provide the services do not make their living the same way banks do. The fees are barely there and the features include so much more privacy and anonymity.
All in all, it can be said that cryptocurrencies cannot be regulated in the common sense. Although governments and banks are trying to do it, it is not really possible precisely because the are made to be different. If they were to impose similar regulations and introduce laws that limit and govern their free distribution and ownership, they would lose their identity as a digital currency and became just another type of traditional money used for nothing else but buying and selling stuff.
Luckily, the world seems to be moving in the right direction in terms of how much cryptos are and could be regulated. A lot of countries who were first unwilling to allow their use are easing off while those that have welcomed cryptos with open arms are continuing to do so. The future is bright and it will bring everything that cryptocurrencies are meant to be but only if nobody starts to treat them like everything else in the world. Not every creation has to be molded into the society’s existing models and systems. Change is often scary but it is the natural order of things and exactly what society should be aiming for. The sooner everyone realizes that cryptos cannot be regulated the same way money is, the faster we will enter a new age.
Some Regulations Do Exist
There are of course some basic regulations on cryptocurrency, like for example having to be 18 in order to officially own it and do business with it on exchanges. You still need traditional money in order to buy or exchange crypto, meaning fiat currencies are a large part of it. That side will always have to be regulated in the same way we are used to. Also, there are many security regulations in order for the money transfers and transactions to proceed without any scams, thefts, or other forms of cyber-attacks. There is also a worrying idea that money laundering can be done through virtual currencies which has prompted federal agencies to conduct researches and investigations to put an end to certain criminal activities. One thing that is very different is taxation, mostly because cryptos are taxed like property and not currency. This further sets them apart from regular money and it is exactly what they need. Mining is not really something that can be regulated and as long as you are allowed to own and use cryptocurrencies where you live you are also allowed to mine it.