The Price of Becoming Mainstream
Cryptocurrency had become increasingly popular over the years. People from all walks of life had at least heard of cryptocurrency one way or another. This is true even if one does not search for it online, one would still come across it through countless online and offline ads.
And if this trend continues, it’ll only be a matter of time before cryptocurrency become a household name and become mainstream.
But would it really that easy? Would Bitcoin Cash, Bitcoin, Ethereum, Litecoin, Dashcoin, Dogecoin, etc. be allowed to become household names without interference? It’s highly unlikely.
Although cryptocurrency have countless supporters, its detractors are nothing to sneeze at either, especially if said detractors are our politicians and regulators.
Before Bitcoin become very popular, it was relatively unknowns save for those lucky few who had seen the future in cryptocurrency, and acted quickly. Back then, there are very few regulators and politicians eyeing Bitcoin as most of them consider it a bubble that would eventually burst. Even the media share this sentiment.
Yes, very few took Bitcoin very seriously – a big mistake on their part.
But as the years passed the “bubble” still did not burst. Not only did the bubble not burst, it even multiplied when others followed Bitcoin’s creator, Satoshi Nakamoto’s footsteps and creates their own cryptocurrencies, many of which simply used Bitcoin as a base for their cryptocurrency instead of starting from scratch – creating cryptocurrencies that greatly improved upon its many flaws and limitations.
Just by seeing the number of cryptocurrencies that appeared after Bitcoin, its plain for everyone to see that cryptocurrency won’t be going anywhere soon.
Bitcoin is becoming more popular and slowly becoming mainstream, and our politicians and regulators has no choice but to take cryptocurrency very seriously. Which they did...
As the disruptive technology behind cryptocurrency, the Blockchain technology, is slowly transforming the world, cryptocurrency is also, ever-so slowly becoming mainstream, even becoming a threat to the almighty fiat currency. And as old fashioned as they are, our politicians and industry leaders felt like they needed to do something about it.
So as to combat what they see as a “threat”, these politicians and regulators do what they do best – control or at least try to control cryptocurrency through crackdowns and regulations.
Stricter Regulations is Inevitable
When it comes to currency (digital or fiat); the government would want nothing less but absolute control. Anything less than that is unacceptable for them.
The reason they wanted absolute control over cryptocurrency was to: One, protect fiat currency, and the stock market; two, to regulate and tax cryptocurrency, and three, to control the price of cryptocurrency which is very volatile. There might be other reasons that I have forgotten or I couldn’t think of but the three I’ve mentioned should be among the main reasons.
Over the years, our politicians did everything they could to put cryptocurrency in the government’s control. But so far, cryptocurrency has remained very resilient and resisted their attempts at every possible turn which displeases them greatly.
Seeing that cryptocurrency simply refuses to bow down to them, some governments turn to crackdowns and even outright ban. For example, some countries like Nigeria and even India chooses to ban, or plan to ban cryptocurrency.
Fortunately, there are also countries that are more open-minded, country like El Salvador that embraces cryptocurrency, specifically Bitcoin, even going as far as to make it a legal tender. Sadly, the El Salvadoran government is a rarity amongst government in the world.
That said majority of governments actually have a neutral stance when it comes to cryptocurrencies. These governments will not fully support cryptocurrency but they would also not ban or suppress it. That is to say, they opted for regulations instead of crackdowns and ban.
Speaking of regulations… the severity of the regulation depends largely from country to country. Countries that are more supportive to cryptocurrency would opt for lighter regulations. For example, several countries in Latin America sparsely regulate cryptocurrencies.
A country like China on the other hand has very strict regulations, and recently has begun cracking down on Bitcoin miners. Also, exchanges are illegal in China too, so there’s that too.
The United States of America, one of the most influential countries in the world, whose stance had been relatively neutral till now, had expressed its desire for stricter cryptocurrency regulations.
This desire had become more apparent when the US Department of State tried to influence El Salvador after their country’s congress passed the bill that would make Bitcoin a legal tender last June 8.
During a press conference, US Department of State undersecretary of state for political affairs, Victoria Nuland told reporters that she’d spoken with El Salvador President Nayib Bukele, urging him to be responsible for their new Bitcoin law – ensuring that it’s well regulated.
Following that the US State Department also released the name of 14 El Salvadorans under the Bukele regime – labeling them as corrupt and undemocratic actors. Even a blind person could see that this is a threat. If the Salvadoran President did not regulate Bitcoin in his country that same level as the US, then he’ll risk running afoul with the US State Department and the International Monetary Fund (IMF).
So as you could see, stricter cryptocurrency regulations are inevitable. Although cryptocurrency had become big over the years, it’s still not big enough to fight against the government’s control.
The Crackdown on Exchanges and Tightening Regulations
Most of you must be aware of this already but Binance, one of the largest cryptocurrency exchanges in the world is currently facing troubles with large number of regulators from several countries like Thailand, Japan, the United Kingdom, and even Cayman Islands.
The aforementioned countries claimed that Binance is unregistered, unlicensed, and unregulated cryptocurrency exchange that’s operating illegaly in their countries.
Why I am mentioning this?
It’s because before this debacle, Binance had been operating in these countries without issue. But after regulators from these countries implemented stricter regulations, Binance had suddenly become an unlicensed exchange that’s operating illegally.
Binance is not the only exchange that’s facing pressure from regulators. A few months back, the South Korean pushes out a bill that requires 200 of the country’s exchanges to register for a business license.
The business license itself is not the problem but rather the requirements to earn said business license. For these 200 exchanges to earn the license and become a legal trading platform they must first partner up with local banks to open real-name bank accounts for their customers which is a very difficult thing to do.
Yes, a simple KYC is no longer enough for the South Korean governments.
What’s happening to Binance and the 200 South Korean exchanges is like a glimpse of the future. As regulations on cryptocurrencies strengthened, our freedom to trade with cryptocurrency freely will become more and more limited.
Unfortunately, this trend will most likely continue, and with the crypto-market’s limited power, there’s very little that we could do to prevent it. Not only can we not prevent it, we must also play the game that the regulators are playing. This is because government can and will crackdown on cryptocurrencies if we don’t.
Anyway, I’ll end the article here– thank you for reading, and have a nice day.
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My other articles: https://read.cash/@beastion
