Cryptocurrency Regulations Introduced by the G20 Could Revolutionise Blockchain Innovation

Regulation of Cryptocurrencies is a hot topic as blockchain adoption increases. Governments are under increasing pressure to create regulatory framework that doesn’t prevent innovation. Co-operation between governments and enterprises using the technology is suggested to yield the best results as discussed by Jonathan M. Padilla.

The regulatory framework implemented will have to be transnational as problems such as money laundering, tax evasion, ferrorist financing and investor protection extend beyond borders. Less risk would be posed by arbitrage where exploitation can occur due to geographical location. Currently an organisation could be operating in a country with different rules and regulations that apply when selling crypto to an organisation elsewhere.

Nations have approached regulating the space differently - such as Japanese exchanges who are self-regulating. Classification of cryptocurrencies is still not set in stone. FINMA (Financial Market Supervisory Authority) is taking steps to classify cryptocurrencies under payment tokens, security tokens and utility tokens. Clarifying the definition of cryptocurrency will help businesses and investors create projects and get involved whilst helping governments to regulate.

The banking sector will need regulation to work out how they will deal with cryptocurrencies and taxing them accordingly. It is certain that more regulation with know-your-client and anti-money-laundering will follow as more people enter the market to either buy or sell bitcoin.

Increased regulations of the sector may see a reduction in the number of new cryptocurrency projects. However, if regulation is implemented with the focus of reducing risk in the market, it has the potential to increase blockchain adoption. Institutional investors looking to buy and sell crypto won’t get involved without the reassurance of regulation.

To make sure you keep up to date with crypto related news and to sell cryptocurrency, be sure to visit us at BC Bitcoin.

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