crypto industry: Implications of a global regulatory framework on crypto industry

Synopsis

A global regulatory framework could also help to prevent fraudulent activities within the crypto space. By creating clear rules and guidelines, detractors would be well aware of the consequences of breaking the rules, and investors would be better protected from losing money to unscrupulous actors.

crypto industry: Implications of a global regulatory framework on crypto industry  0ANIThe year 2009 was when the world’s first crypto ‘Bitcoin’ was launched. After more than a decade, El Salvador became the world’s first nation to adopt Bitcoin as a legal tender in September 2021. Other countries where crypto is legal include Slovenia, Germany, Canada, Malta, The Netherlands, Singapore, Estonia, Switzerland, and Portugal. However, the crypto industry is yet to have progressive global regulations in place.

In April 2022, Cuba’s Central Bank issued regulations for all virtual asset providers after the nation announced to authorise and regulate crypto in August 2021. Gradually, more countries have begun adopting laws and regulations to create a secure environment for investors.

In recent months, there have been active conversations to set up global regulations for the crypto industry. A global regulatory framework is a set of guidelines that govern the operation of businesses and organisations around the world. It is designed to promote fairness and transparency in the marketplace and to protect consumers and investors from fraud. The implications of a global regulatory framework on the crypto industry are far-reaching and could potentially have a major impact on the way business is conducted.

Let’s discuss the implications of the global regulatory framework in detail:
One of the most important implications of a global regulatory framework is that it would bring more transparency to the crypto industry. This would likely lead to more institutional investment as well as an influx of new users who are looking for a safe and regulated way to invest in digital assets.

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A global regulatory framework could also help to prevent fraudulent activities within the crypto space. By creating clear rules and guidelines, detractors would be well aware of the consequences of breaking the rules, and investors would be better protected from losing money to unscrupulous actors.

Finally, a global regulatory framework will help in creating a positive impact on the price of crypto assets. As more people gain confidence in a transparent and secure trading environment, demand for crypto assets is likely to increase, driving up prices.

Benefits of a global regulatory framework:
1. Clarity and certainty: Businesses would know exactly what rules they need to comply with, making it easier to operate in the space.

2. Level playing field: Smaller companies would have a level playing field with larger incumbents as all companies would be subject to the same rules and regulations.

3. Increased investor confidence: Greater clarity and certainty around regulations could help increase investor confidence in the industry, leading to more investment and growth.

4. Greater innovation: A level playing field and increased investor confidence could lead to greater innovation in the crypto space as businesses look to develop new products and services that meet customer needs.

Overall, the implications of a global regulatory framework on the crypto industry are likely to be positive. But as the crypto industry continues to grow and evolve, so should the regulations.

One of the key challenges is how to deal with cross-border activity. With crypto assets and businesses often operating across multiple jurisdictions, it can be difficult to develop a cohesive regulatory approach.

Another challenge is ensuring that any global regulatory framework is compatible with existing laws and regulations in individual jurisdictions. This is particularly important given the decentralized nature of much of the crypto industry.

Finally, it is worth noting that any global regulatory framework is likely to take some time to develop and implement. In the meantime, businesses operating in the space will need to continue to navigate a complex and ever-changing regulatory landscape.

Final thoughts
In recent years, there has been an increase in the number of countries introducing regulations governing the crypto industry. These regulations are designed to protect investors and reduce the risks associated with crypto assets.

Overall, a global regulatory framework for the crypto industry would have both benefits and challenges. But the benefits seem to outweigh the challenges at this point. It is important to carefully consider these implications before moving forward with any changes.

(The author is COO at ZebPay)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)crypto industry: Implications of a global regulatory framework on crypto industry  1crypto industry: Implications of a global regulatory framework on crypto industry  2Wednesday, 04 Jan, 2023Experience Your Economic Times Newspaper, The Digital Way!Read Complete Print Edition »

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    Updated: 01/04/2023 — 06:00