At Wild Times Like These, a Regulated Crypto Space is What We Need The Most
The Crypto space found its fame in offering financial freedom, the promise of something greater than the traditional monetary system built on credit scores and financial backgrounds. The financial crisis of 2008 revealed the true face of a much-flawed economy and at a time of devastation, Bitcoin rose to offer a safer solution to the people.
Fast forward to 2022, and it seems like history is repeating itself. A global pandemic, geopolitical conflicts, and the aftermath of the policies taken by the major financial entities around the world have painted a gloomy horizon for the world economy, warning us with the familiar hue of an upcoming crisis.
But, even though things look awfully the same, one major thing has changed: cryptocurrencies are not saving the day anymore. Rather than alleviating the situation, it seems like they’re actually inflicting more pain on customers.
The dramatic crash of Luna and some major crypto platforms, like Three Arrow Capital, Celsius Network, and Voyager Digital, are just a few recent examples, proving once again that the cryptocurrency and blockchain industries with all their tremendous potential, can be greatly harmful if left unregulated.
Proper Regulation Makes Way For a Brighter Future
The current turmoil within the crypto space followed by consecutive bankruptcies and the huge deficits showing up on balance sheets have caused many investors and traders to suffer great losses, forcing the authorities around the world to take the regulatory issues within the crypto space seriously.
Recently, the European Parliament reached a provisional agreement to cover all the crypto-assets within a single regulatory framework across Europe for the first time. Not long after, FSB followed suit, announcing that they would propose “regulatory and supervisory approaches to stablecoins and other crypto-assets” to the G20 Finance Ministers and Central Bank Governors in October.
This almost unified response of the major regulatory bodies to recent incidents confirms that the governments are finally accepting the urgency of a consistent regulatory framework for the crypto space. This holds the promise of a brighter future for both customers and crypto-related businesses alike.
With robust and consistent rules, businesses can proceed to obtain the essential licenses under clearly defined categories, which ensures customer protection and safety. This can improve the flow of institutional investments entering the space significantly as the lack of regulation is one of the main reasons why many of the major companies are keeping their distance from the crypto space.
With more investment, businesses can offer better products and services which eventually leads to a healthier competitive market. As a result, customers can finally receive the services they truly deserve, not having to settle for poor options only because they don’t have access to better ones.
With better rules, the weaker projects with no value and prospect for growth will be pushed out of the space as users consider them unworthy of their time and fund, helping the market to improve even more and getting closer to the final goal of mass adoption.
One may argue that regulations undermine decentralization, possibly the most valuable offering of blockchain technology. Even though there’s certainly value to this argument, we should not forget that it takes time for a nascent market to mature and as the builders of this ecosystem, it’s our obligation to make sure that no customer is left hurt in the process. Proper regulation could equip us with the required means to protect our customers until true decentralization is in place.
It’s no secret that cryptocurrencies and blockchain technology offer unprecedented possibilities and it seems like a sound regulatory framework is all they need to achieve the noble grounds they’ve been initially created to reach.
