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Bitcoin and other crypto offer many advantages in general, but the most important one seems to be an unprecedented level of financial freedom. Simply put, crypto offers financial freedom by giving you control over your funds. More places are allowing people to pay for goods and services with cryptocurrency. True financial freedom can’t be achieved until more customers and consumers use crypto instead of other traditional payment methods.
Regardless of the promise of financial freedom, crypto has its problems.
- There is persistent artificial pricing and speculation.
- Many cryptocurrencies are facing scalability issues.
- Blockchain networks struggle to keep up with demand.
- There is still little information about the relationship between global developments and crypto prices.
Many governments are skeptical about crypto. However, like El Salvador, some have adopted it as a legal tender. Countries with large economies, like the United States, have refused to recognize crypto as a legal tender, and they have valid reasons for doing so. Despite the undeniable benefits that crypto seems to afford, it presents a few specific challenges to some governments.
It is difficult to regulate Crypto.
The United States government wants to regulate cryptocurrency, but it hasn’t established regulations because it lacks the resources to audit cryptocurrency. Bitcoin was first released over a decade ago; world governments are still confused and searching for ways to make crypto regulations.
Criminals can use it.
Unsurprisingly, crypto has become a staple used by criminals for financial transactions. Because these transactions are difficult to trace, it has made it easy for criminals to buy and sell arms, illegal drugs, and other unauthorized items via the Dark Web. After infecting popular apps with ransomware, hackers frequently demand payment in cryptocurrency. With no government regulation on crypto, nefarious activities are carried out and effectively camouflaged using these ‘agents of financial freedom.’
It aids citizens’ circumvention of capital controls.
Governments often institute capital controls over their legal tender to prevent exports or outflows of its currency that could impact its value. Bitcoin is state-less, belonging to no state, making it easier for citizens to circumvent capital controls and export wealth. The decentralized system of crypto can potentially dismantle the current system. Because cryptocurrency removes intermediaries, it does away with the elements that help to stabilize a country’s official currency.
Until crypto and the systems used to navigate it mature, established authorities may continue to distrust and strongly criticize it. Crypto’s maturity greatly depends on its adoption and increased utilization.
What Are The Possible Benefits of Cryptocurrency Legislation?
There are many ways that cryptocurrency legislation will impact the crypto industry. At this time, little information has been gathered, but some opinions about governments establishing regulations regarding crypto exist.
In an interview with Stevie Johnson, Collin Plume, President, and CEO of Noble Gold Investments, shared his unpopular opinion about the present state of cryptocurrency, which is “there’s enough (cryptocurrencies) out there now, we don’t need more. I believe we should focus on what we have and try to make them more acceptable and safer.” Plume bases his opinion on the fact that Crypto is expected to have a finite amount eventually, which will benefit everyone.
Some significant benefits of cryptocurrency government regulations are –
1. the end of joke or fake cryptocurrencies created by fraudulent people trying to steal money and put people in financial danger.
2. creating a system that everyone can use, including those who are not tech-savvy.
3. creating stability that allows U.S. investment companies to make money and keep that revenue in the country.
Because of its potential, investing in cryptocurrency is very attractive to traders. Still, underlying markets for these derivatives are not regulated, and none of the important cryptocurrency exchanges are registered under the Securities and Exchange Commission (SEC).
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Conclusion
In the past, purchasing a home was one way to measure your worth. While some people still agree with that idea, many believe it is an old-school philosophy. They believe that your worth is measured by what you are doing for yourself and your ability to access alternative investment forms. How government regulations will impact crypto is unknown. Regulations may end crypto’s promise of financial freedom, or they may make crypto more accessible. The outcome remains to be seen.
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