Will The US Finally Regulate Cryptocurrencies?
The day of cryptocurrencies regulation in the United States may not be far off. Federal regulatory agencies in the US are set to release a report on the crypto industry. The report is expected to contain a request for legislative regulations to be imposed on the industry to guide its active players, traders, and creators.
Bitcoin has been smashing records; setting new all-time high prices, getting ETFs listings, and getting adopted as an official currency in El Salvador. Investors are now closer to bitcoin and cryptocurrency investments than they were a couple of years back. This has also increased the attention of the US government agencies in charge of regulating the financial and economic sector and now, the industry is about to get updated regulations.
What are The Current Regulations?
Crypto-based financial activities in the US are under the control of different government agencies. Each agency is responsible for the regulation of various crypto-based instruments. For example, the Securities and Exchange Commission (SEC) regulates public trading, contracts, and fractionated trading. The commodity Futures Trading Commission (CFTC) regulates derivatives. Finally, every financial transaction is under the control of the Law as stipulated by the Financial Acts.
Based on these, the regulation of the cryptocurrency industry should have been done and long concluded but one seemingly minor complication has prevented that; according to the SEC, bitcoin is not a security and cannot be regulated as one. This single complication has become the mother of all contentions to give cryptocurrencies a legal status in the US. And the result? Altcoins are having it harder than bitcoin and ethereum, the two largest cryptocurrencies.
The US government currently prohibits the public sales of unregistered securities and is known for its ferocity in going after companies that break that rule. XRP comes to mind.
One of the most promising Altcoins, XRP, the native token of Ripple Labs, is battling a lawsuit filed by the SEC after accusations of XRP selling tokens as securities and raising $1.3 billion for Ripple Labs and its founders. The case has dragged on for nearly a year now. Legal and financial analysts believe that the outcome of the case will go a long way in shaping future government response and regulation of the crypto industry.
Will Cryptocurrencies Be Adopted Soon?
Although many people believe that the US is ripe for cryptocurrency adoption the way El Salvador is leading crypto adoption in Latin America, analysts say that the issue of regulation remains a bone of contention before digital tokens will be accepted. With an increase in the number of crypto terrorism and money laundering through cryptocurrencies, the government seems justified in its pursuit of proper regulations that will give it more control over the industry.
The rise of Central Bank Digital Currencies (CBDCs) is also a reminder that the digital token space is big enough for regulations and the freedom of investment. Ultimately, the deciding factors will include safety of funds, government access, and convenience of use.
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