Is Self-regulation Possible with Cryptocurrency?
For a little more than a decade, digital money has been slowly but steadily taking over, even with all false info and skeptics trashing it on a daily basis. Reasons for that are plenty, from simplest ones like no matter what someone may say, investing in cryptocurrency can lead to huge profits, to more complex ones like not wanting banks and governments overlooking your finances. No matter the reason, the popularity of cryptocurrencies, and especially Bitcoin, has been only growing, but recent events raised some new and some old questions about safety and regulation.
There is an increase in scandals and hacks in cryptocurrency exchanges, and we cannot say that it’s not quite worrying. Most investors are afraid of losing their money, and these actions would be a great way to improve security in the crypto exchanges. However, this may take some time as most governments and agencies have not really understood how crypto works. The only hope is in the exchanges trying to self-regulate before other frameworks are put in place. There are many people who advocate for the self-regulating of the crypto exchanges so as to help the growth of the industry.
What Does Self-Regulation Mean?
Self-regulation is a process where a code of conduct and guidelines are introduced to control operations in a certain industry. For cryptos, the exchanges are an integral part and can play a vital role in bringing order to this whole booming industry, and as such, need to make some changes or at least adjustments regulatory-wise. That would be the best way to curb security threats and increase transparency in the crypto markets. When establishments self-regulate, it becomes easier for authorities to oversee them, and it also becomes easier to audit and keep things in check. Having clear guidelines and modes of operation makes any industry safe and secure, which is the most important thing for every industry.
Why Self-regulation is Imperative for Cryptocurrencies
The cryptocurrency world looks crazy and wild at the moment, with many investors unaware of what should be their next move and what they need to do next. Cryptocurrency is an unregulated financial system and has so many complicated elements, which sometimes can be confusing and difficult to understand. However, if the industry can start to self-regulate, it can be easier for the government and other authorities to keep the ecosystem safe for investors and other participants. On the other hand, governments overlooking everything is against the sole nature of digital money, but obviously, it’s not about that. Namely, the platforms will self-regulate and observe everything, and governments will act as support. Clearly, the existing laws are not adequate to control the virtual currency world. Policymakers have made attempts to put guidelines in place, but this does not seem to work. The main hindrance is the fact that it takes a lot of time to understand how cryptocurrencies work, and this is trouble, not just for so many people but governments too.
At the moment, the industry seems to be operating in a haphazard manner, which is rather worrying. Most financial systems are interdependent, and this is what creates the global ecosystem. That means that when cryptocurrencies are left unregulated, they will end up affecting other industries as well. Self-policing would be a great start to create clear guidelines for regulating the virtual currency industry that seems to be gaining traction with every passing day. Through such measures, investors and traders on BigMoneyRush will go about their transactions with confidence, and the crypto market will be a much safer place for every participant.
In the modern way of doing business, everything is about satisfying customers’ needs, as once you do that, they will come back for more, and if they come back for more, it will mean that they trust you. Customer trust is very important when it comes to trading and investment opportunities, or when it comes to money, for that matter. While there are those who are thriving through unregulated transactions, the risk levels are pretty high, and it is never a good idea to risk when it comes to money. Once people notice that there is a definite code of conduct, they will want to venture into the world of cryptocurrency. Smart contracts are becoming a common trend, and most of them are executed on cryptocurrency networks. To be able to draw more players into this industry, there have to be clear policies that drive security, and once there is proper security, this industry will blossom. That will surely attract more clients and make the existing ones feel much safer about their funds.
Self-regulation will come with so many benefits to the crypto market, and it will make trading much safer. In the past few weeks, Japan took measures to regulate the crypto exchanges, and this has really changed the dynamics of the industry. The hack on Coincheck affected a number of traders and investors, which would have been averted if there were regulations. Transparency will be increased when there are policies that have been established to control the industry. It is necessary that the whole world realize the importance of the self-regulation of cryptos and take the necessary measures to achieve that as soon as possible.
The world is moving towards encouraging self-policing of the crypto exchanges, and many countries are considering it as the best possible solution. South Korea and Japan are some of the countries that have taken the lead in introducing self-regulation for cryptocurrencies to the world. Because it is one of the best solutions, more countries and regions should follow suit for the overall benefit of the global economy. The USA has also confirmed that they are working on introducing certain policies and regulations, which means that we can yet expect positive changes. These positive changes can change the crypto market and make it even more popular among investors.
Governments are yet to put up clear guidelines for regulating cryptocurrencies, but it is not an easy job. Until such a time comes, self-regulation for the crypto agencies may be the way out. That will continue to boost the confidence of customers and prevent security breaches.