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The Need for the Establishment of Cryptocurrency Regulations Regulation of cryptocurrency has been slow in most parts of the world. In the US, cryptocurrency has gotten the attention of both the Federal, but not much has been done to establish laws and regulations. A number of state governments have passed regulations on cryptocurrencies, Bitcoin, and their uses. For instance, Wyoming passed a bill that exempted property taxation on cryptocurrencies while Colorado passed a bill supporting the use of blockchain for government record-keeping (Global Legal Insights). Nonetheless, there is no comprehensive regulation or laws as a result of new technology. Besides, a uniform definition of cryptocurrency has not been made, making it's regulation quite difficult. Some jurisdictions have tried to establish a detailed definition while the majority has remained with a broad definition. For this reason, it is quite difficult to regulate how new technology is used, yet it has many applications.
Instead of the establishment of comprehensive regulations, many jurisdictions and institutions have chosen to advise people against the use of cryptocurrencies. However, this is a big mistake, especially as technology is being further developed. For instance, recently, Facebook Corporation proposed Libra, its permissioned blockchain digital currency. The currency does not exist yet but the corporation plans to launch it in 2020 (Libra, 2019). Therefore, due to the reputations of some companies like Facebook, it is possible that a large number of people would be attracted to adopt the use of digital currencies.
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It might be difficult for companies like Facebook to launch the use of currencies in the USA, but the presence of some regulations and the lack thereof can create many chances for such companies to launch their products. Therefore, as more and more digital currencies are created, there is a growing need for effective and comprehensive regulations. There is a need for regulations mainly because of the following reasons. To Control Misuse of Cryptocurrencies The lack of comprehensive regulations, open a chance for criminals to use digital currencies for illicit purposes like evasion of taxes. Furthermore, criminals can use the instability and volatility of the currencies to steal from consumers. Consumers are also at risk because of the possibility of fraud and hacking of their digital wallets.
To Govern the Digital Financial Sector around the World The US dollar remained the world currency for many decades, even when it faced stiff competition from other currencies such as the Japanese Yen. Currently, the US dollar is facing a strong challenge from both the Chinese Renminbi and the Euro. In addition, the rise of the digital currency is currently likely to challenge the US dollar. The worldwide adoption of the digital currency could greatly affect the US dollar, and so there is a need for regulation to control financial governance around the world.
patrick armstrong augusta georgia In addition, it is important to establish regulations to lay a good foundation for the utilization of the new technology, and for the US to remain the leader in technological advancement and avoid driving investment in the technology overseas. For example, by allowing Facebook to launch its Libra, the company would contribute a lot in revenues to the US, considering it currently has a large customer base around the world. Therefore, through the adoption of the use of cryptocurrencies, the US would be in a better position to remain the leader in the newly developing industry. Nonetheless, the new technology should not be over-regulated as this can also destroy it. Instead, there is a need to ensure that customers are well protected and that criminals do not misuse digital currencies for illicit purposes.
References: Global Legal Insights (GLI), (2019). Blockchain & Cryptocurrency Regulation 2019/USA. https://www.globallegalinsights.com/practice-areas/blockchainlaws-and-regulations/usa Libra, (2019). Libra is for the World. https://libra.org/en-US/vision/