Regulation of crypto is important for future development
The G20 is currently meeting in Japan and the future of cryptocurrency is on the agenda.
Many cryptocurrency purists feel regulation will stifle the development of cryptocurrency since regulation seems diametrically opposed to the decentralization and privacy goals of currencies like Bitcoin.
In fact, I understand the arguement - we all need to be on guard against over-zealous regulators like Mr. Sherman who recently called for the banning of all cryptocurrency in the US because cryptocurrencies might undercut the leverage of the ‘petro’ dollar.
… an awful lot of our international power comes from the fact that the dollar is the standard unit of international finance and transactions. Clearing through the New York Fed is critical for major oil and other transactions and it is the announced purpose of the supporters of cryptocurrency is to take that power away from us …
However, I think this point of view might be a little short-sighted. Search for ‘cryptocurrency’ on YouTube. You will find a lot of what I call ‘cowboy‘ videos. Videos dedicated to the cyberpunk-like features of cryptocurrency — videos filled with excitement over price volatility, wild speculation, and unsubstantiated rumor.
These features will not attract the masses to cryptocurrencies. In my opinion, a feeling of protection provided by regulatory watchdogs is critical for average citizens to take the plunge into the world of cryptocurrency.
Take for example virtual currencies like Japan’s PiTaPa or ICOCA payment card systems or China‘s Wechatpay or Alipay. These platforms, are rapidly attracting new users primarily due to the sense of security that regulation brings.
Rather than ignore that reality, cryptocurrency advocates should embrace regulation to establish a beachhead with the general public. Once a well-established part of the world economy, cryptocurrency will have the leverage and public support to start influencing the rules and regulations governing this important technology in a meaning way.
What do you think about cryptocurrency regulation? Please leave your comments.