Regulation by the government is aimed at making the virtual currencies realistic and making sure that they are open in what they transact to avoid risks that may be involved. Governments worldwide have had their leaders understand the importance of joining the cryptocurrency era to enhance the economy’s global growth.
Regulating cryptocurrency is important so that its market is safer for investors. Increased financial regulation gives guidelines to companies on how to innovate in the crypto economy. However, there are different arguments that the crypto’s negative impacts will increase, but others argue that regulating it will improve the digital market. As Tally Greenberg says,” Regulations will come up, and they have to come up at the same point, which would stabilise the market even further.”
Most English-speaking countries are beginning to regulate cryptocurrency, while others are still banning it for fear of attracting criminals. For instance, in India, the government plans to introduce a bill during the winter of parliament to classify cryptocurrencies as financial assets and protect the interests of investors. Similarly, in the United States, cryptocurrency falls under a scope that the Bank Secrecy Act regulates. It ensures that investors are registered and maintain records and reports they account to the authorities.
Investing in the digital market comes with various risks, mostly being hacked. The authorities put aside different regulations. It prevents market manipulation. Bitcoin being the world’s oldest cryptocurrency, can be manipulated, so the authorities help do away with volatility. In addition, investors have a chance to select which cryptocurrency to invest in since they get to know their risks and how digital assets perform. The government also helps investors know about online fraud.
When the government regulates and sets aside measures to protect the investors, and they are assured of compensation in case of any loss, they invest comfortably. Government regulation on cryptocurrency makes investors understand the risks associated with digital market technology. In today’s world, technology is advancing at a high rate, and the different changes in it can bring danger to digital currency. Once the government takes a role and regulates the cryptocurrency, the investors get informed of any danger that can impend and the risks associated with it so that they do not make any mistakes when making decisions. Failure to regulate cryptocurrency, in many cases, leads to money laundering, thus attracting criminals.
In conclusion, the government should ensure that its regulators know the value of Bitcoin so as not to attract criminals. The regulators should ensure that crypto is transparent so that the customers are sure and safe in their transactions. If transparency penetrates all through and measures that put away criminals are set, cryptocurrency will grow and increase to a greater percentage. To prevent this, the government should keep track of the investor’s identity and the location that they are in while transacting.
