Is Cryptocurrency Regulation a Waste of Time?

Published on February 6, 2018

by Samuel Bocetta
Clash Daily Guest Contributor

Many people were in a panic this month after news broke about European regulators looking to place a ban on popular retail derivatives of cryptocurrencies. The European Securities and Markets Authority’s efforts to restrict leveraged trading platforms is just the latest sign of international unease with the rise of decentralized currencies like bitcoin and ether.

In December of 2017, it was reported that regulators all across the Asia Pacific (Australia, Singapore, etc.) were concerned about the surge in bitcoin prices with the Bank of Japan governor calling it “abnormal.”

And they are hardly alone in their concern. The South Korean government is pushing legislation to ban cryptocurrency trading entirely which comes as a shock to many since the region is one of Bitcoin’s largest markets.

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France and Germany’s finance ministers have vowed to crack down hard on cryptocurrency markets because of their supposed impingement of sovereignty and some have predicted a “blizzard of regulations.

Others have even speculated that China may want to place restrictions on trading as well since the cryptocurrency’s rise conflicts with their goal to maintain a stable yuan. Authorities in the region have discussed plans to shut down or disrupt bitcoin exchanges.

All of this may seem perturbing to those who have watched Ethereum and similar currencies blow up in the last few months. After all, just weeks ago it seemed like the ideal time to sink one’s savings into a cryptocurrency portfolio. But news of the potential ban has raised a red flag among the more apprehensive investors.

The good news is, there is no need to fear. Many experts have weighed in on the subject and the consensus is that a ban is implausible. As Aidcoin co-founder Francesco Nazari Fusetti has said, “It’s impossible to ban bitcoin and cryptocurrency trading because the more you regulate, the more it will become popular.”

Nazari Fusetti’s rationale makes a lot of sense, operating as it does on the notion that everyone wants what they’re told they cannot have. It’s the same reason why firearms sales skyrocket in the wake of gun control bills.

At the North American Bitcoin Conference in Miami, crypto aficionados made it plain that any government interference would not quell their ongoing interest and activity in blockchain-based assets.

While the monstrous gains of virtual currencies have alerted regulators to the possibility of investment fraud, those with an intimate knowledge of the market understand that cold storage and similar solutions protect them against theft, and miners work tirelessly to confirm transactions in the blockchain.

It’s also worth noting that cryptocurrencies have proven out to be more than a bit resilient. As we saw this past week, bitcoin sunk below $10,000 on the Bitstamp exchange, only to recover to trade at $11,718 the very next day.

Any currency that can bounce back by a margin of 4.6 percent in twenty-four hours is a stable currency, to be sure. And before you let region-specific regulations give you pause, consider the true implications of nations like South Korea banning cryptocurrency trade.

Such intervention will result in increased order flow outside that nation, thereby stimulating the crypto economy in places where digital assets have not been restricted.

The virtual currency space is one that continues to grow with new platforms and currencies being added almost every day. Businesses and banking institutions have already begun to accept bitcoin and more are expected to adopt it in the near-future.

As innovations in blockchain tech are made by startups like Cypherium, interest in the space will become more widespread as time goes on. Global regulators can scare as easily as they want, but cryptocurrency investors have no reason to worry. Cryptocurrencies aren’t going anywhere but up.

Sam Bocetta is a freelance journalist specializing in U.S. diplomacy and national security, with emphasis on technology trends in cyberwarfare, cyberdefense, and cryptography.

photo credit: andreastrojak Bitcoins via photopin (license)

 

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