Early proponents of Satoshi Nakamoto’s innovation of Bitcoin would be horrified by outside regulation. Bitcoin was supposed to be a completely decentralized system where interference from governments was unnecessary, even obsolete. It seems now, however, that cryptocurrencies like Bitcoin cannot govern themselves and they do need some outside regulation. Although die-hard crypto fans may be upset, the regulation does have some advantages:
- Fewer scams – Unfortunately, there have been a massive amount of scams, exit scams, phishing schemes and digital bank robbers surrounding cryptocurrencies. Government involvement should translate to more scam warnings, more circulation of information about safe investing, penalization of violators, and hopefully fewer scams. Knowing that law enforcement is on their back, scammers and fraudsters may be deterred.
- More trust and liquidity – The truth of the matter is that most people actually trust the establishment. Cryptocurrency regulation can provide people that would have never have trusted the industry a new found faith in it. This can open the industry to a whole new range of investors and traders that can infuse additional funds to the crypto ecosystem, helping it grow and expand.
- It’s a better option than banning – In some cases where governments have been unable to gain sufficient control over the crypto industry, they have banned it altogether. Regulation is definitely a better option than banning the use of cryptocurrencies. If a government is actively involved in cryptocurrency regulation, it will gain a better understanding of it and perhaps even incorporate it, to the benefit of public infrastructure and services.
- Green light for other industries – When the government decides to get involved with something, other industries may be more comfortable following suit. Banks, restaurants and the tourism sector are usually on the list of top contenders to start integrating crypto and Blockchain into their respective industries.
We have already the regulation of cryptocurrency working wonders in many countries, such as Japan. Japan has in many way a system of strict regulation of cryptocurrency, yet it is still one of the major crypto hubs in the world.
The boogie-man of early crypto-enthusiasts may, in the end, turn out to be the industry’s best friend.
