It is said that cryptocurrency could either be a form of low-risk investment or a medium of exchange for good. However, it certainly cannot be both.
Bitcoin once again had come under the spotlight after its ascension above US$ 28,000 in the preceding weekend.
Currently, cryptocurrency had been termed as the “future of exchange medium”. It was also being said that Bitcoin might even replace the US dollar and outperform gold as well.
But despite all the debates and hype, cryptocurrency is still a fresh and unique form of currency. This is why there had been many reservations against its utilization as of exchange rather than a mode of savings.
It is said that the winning point of cryptocurrency is that it is non-intermediated and provides a direct mode of payment between parties. However, in the long run, the absence of regulation could also become a losing point as cryptocurrencies are immensely unstable. This means that in order to keep their values intact, some institutional structure would need to be put in place.
In the words of CoinDesk, crypto regulation is something where the actual problem rests. This is so because the majority of crypto experts are of the view that the success of cryptocurrencies is because they are unregulated. But what would be the effect if Bitcoin had been regulated, suggested CoinDesk.
The danger is that central governments would never accept financial exchange system which is operating outside of their control. Resultantly, certain restrictions and strict laws would be promulgated by governments and regulators. CoinDesk informed that in most parts of Europe, crypto laws had been introduced and implemented. Similarly, many countries in Asia had imposed taxes upon crypto trading. It reported that most recently India had imposed GST on the sale and purchase of Bitcoins. Resultantly, the majority of Indian investors had refrained from further investing in Bitcoin.
Similarly, in the US, US Regulator had prepared a draft bill regarding crypto which is pending approval. In the proposed law, US regulators had directed crypto owners and exchanges to provide information of their crypto assets. Certainly, nobody liked it because by birth cryptocurrencies were non-regulated.
But sooner or later crypto investors should expect that regulation would be coming soon, concluded CoinDesk.