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Crypto’s Regulatory Crossroads: A Path Forward
By Kapil Rajyaguru
Cryptocurrencies have, exceedingly, become a subject of interest to customers, traders and investors. Because cryptocurrencies operate without intervention of traditional financial institutions or any government entities.
However, now regulators have started paying attention to this new asset class and now world governments are working together to bring transparency, security and regulations in this market.
Even now, the absence of laws and regulations in the cryptocurrency world keeps customers more in line with traditional finance than with cryptocurrency.
Regulation has benefits and drawbacks for the cryptocurrency sector. Regulations will give this new asset class legitimacy and in turn attract institutional investors to this unregulated market. However, some believe that regulations might asphyxiate innovations and create too much red tape for the new business to enter in this market.
Plausibly, there is no denying that cryptocurrencies have created a lasting impression on financial market in a very small amount of time. They are now widely available in the global economy, having formerly been niche products. Since cryptocurrencies are becoming a significant player in the global investing landscape, regulation would reassure investors.
Regulations would stop the irresponsibility and malpractice of crypto institutions. The correct regulations would protect investors’ funds while fostering innovation in a secure environment.
Clear guidelines on how these exchanges should function would be established by regulations within the cryptocurrency sector, protecting customers. This will stop the widespread fraud and misconduct that occurs on unregulated cryptocurrency exchanges. Reducing financial misbehavior and fraud will aid in boosting confidence in the cryptocurrency market.
Sustainability requires regulation. Any exchange that breaks the law is doomed to failure and may be forced to utilize consumer money to settle its debts at any point. The exchange demonstrates that it is not designed to ensure that companies are solvent, and that money is managed properly because there are no regulations in place.
A level playing field for all players in the bitcoin market will be made possible by regulations. A thriving and healthy trade market will be established by establishing clear guidelines and criteria for operations.
Users risk courting insolvency and the loss of personal assets and data if they do not prioritize licensed and compliant exchanges over unregulated ones.
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