Governments and regulators are far behind in understanding cryptocurrencies and how to regulate them

By | December 28, 2021

Behind the scenes, governments and their regulators are struggling to come to terms with the complexities of the world of cryptocurrencies, such as stablecoins, NFT, DeFi, money-making games, and many more facets of a cutting-edge technology sector in rapid evolution. .

On the surface, although they are playing cool, issuing a strange pronouncement to warn citizens of the dangers of dabbing in a world so “dangerous” where the investor does not have the same “protections” that the traditional financial sector offers.

However, regulators have a responsibility to catch up behind the scenes. Despite the amount of effort they must be putting into the problem, they are paralyzed by speed, innovation, and the complexities of the technology itself.

For example, it is blatantly obvious that the Securities and Exchange Commission, one of the most vocal regulators on crypto, is back with the dinosaurs, to the extent that the Gary Gensler’s comments, the SEC chairman would suggest.

The SEC leader seems to believe that he will be able to fit all cryptocurrencies in the same basket of values, applying a proof of 1946 that was designed to determine whether Florida citrus groves were stock or not.

Surely, given the pace of technology since those times, we must rewrite the laws of values. Not only this, but given the way cryptocurrencies and blockchain are changing the face of many traditional sectors, it would seem logical to have a single regulatory body that specializes in this field and listens to the expertise available across the space. of cryptocurrencies.

But what we have so far is far from encouraging. A report by the Financial Crimes Enforcement Network (FinCEN) stated that the Treasury would be applying its anti-money laundering controls to cryptocurrencies, while the Financial Action Task Force did indeed include a mention of NFTs in its guidance on cryptocurrencies.

Of course, we also have the section in the recently passed Infrastructure Bill, which is so broad in its definition of a “broker” in crypto, that when and if it goes into effect, it will destroy many crypto participants just because the requirements reporting will be beyond your powers to comply.

Perhaps some of the governments could go the way of China and simply ban any cryptocurrency-related transactions. Yes, this will destroy all the innovation they bring in, but it would certainly ensure that citizens would be forced to use central bank digital currencies, helping the crumbling fiat monetary system last a bit longer.

So it seems like the crypto industry is facing tough enforcement from bodies that just don’t get it. That should ensure that it is delayed for many years and would go a long way to appease concerned gamblers in the legacy financial system.

However, if someone in authority was really interested in exploiting the most exciting and revolutionary technology from the internet, perhaps they should think about allowing a specialized type of crypto watchdog to operate.

This watchdog could be made up of experts from all sectors within the crypto industry, experts who would be incentivized to do the right regulation, rather than bureaucrats with an ax to grind like the aforementioned SEC chairman.

With a ‘fourth shiftOn the horizon, it is said that the institutions will suffer “demolition and reconstruction from scratch.” Given that the existing monetary system is on the brink of collapse, could crypto be the currency of the people rising from its ashes?

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.


Source: https://cryptodaily.co.uk/2021/12/governments-and-regulators-are-just-so-far-behind-in-understanding-cryptocurrencies-and-how-to-regulate-them

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