Markets arise spontaneously and open up new opportunities. As the number of market participants grows, potential risks also become more visible. The rules of the game must be clearly defined and strictly controlled. Ultimately, legislation comes to all markets, and cryptocurrencies are no exception. The ability to sell BTC to XMR is valuable in itself, but it is much better when everyone involved in the transaction is confident in its security.
The popularity of cryptocurrency is growing, and the number of its owners is measured in millions. At the peak of the cryptocurrency market capitalization, it reached almost 3 trillion. dollars. Compared to traditional established markets, this seems simple, but the industry’s growth rate has long demonstrated the need for regulation. The collapse of individual stablecoins and the bankruptcy of some cryptocurrency companies led to significant losses for crypto investors.
What are they planning to do in the USA?
In light of these events, the first concept for the development of legislation in the field of cryptocurrencies was developed in the United States. In accordance with this concept, the following national priorities are taken into account:
- Protection of consumer and investor rights.
- Availability of financial services.
- Ensuring financial stability.
- Combating illicit financial flows.
- Maintaining US global leadership in the financial sector and economic competitiveness.
- Development of “responsible innovation”.
How will the cryptocurrency market be regulated? Unfortunately, self-regulation in the global system is possible only in an ideal world, which is inhabited by ideal people. In practice, we live in a reality where there are ordinary, imperfect people. Apart from positive traits such as kindness, compassion and many others, there are also controversial situations, mistakes and even malicious actions.
This concept specifies a list of institutions responsible for regulating the cryptocurrency market and defines their main functions. Cryptocurrency compliance will be the responsibility of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Their responsibility will be to investigate cases of fraud, theft of cryptocurrency assets, deliberate deception of consumers with promises of guaranteed high profits, falsification of financial documents and other similar violations.
Issues of cyber vulnerabilities in the world of cryptocurrencies, especially in the field of stablecoins and asset backing, will become part of the remit of the Ministry of Finance (MoF).
Some cryptocurrency projects with the initial goal of reducing costs and simplifying financial transactions have successfully demonstrated their effectiveness in practice. Over time, regulation of the cryptosphere will also affect providers of such payment solutions.
The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) will take into account complaints received from crypto investors. The Financial Literacy and Education Commission (FLEC) will take on the task of raising public awareness about the risks in the cryptocurrency market and common fraudulent practices.
As part of the fight against money laundering and countering the financing of terrorism, it is planned to amend bank secrecy laws and other regulations that will expand the scope of regulation to digital assets and participants in this market.
Why is regulation of the cryptocurrency market necessary?
Cryptocurrencies are continuously developing and becoming an increasingly important part of the global financial system. In this regard, there is a need to regulate this market. Cryptocurrencies are here to stay, and attempts to abolish or completely ban their use are neither feasible nor practical. Instead, it is better to manage this market, make it more understandable, transparent and safe for all its participants.
Regulation of the cryptocurrency market does not boil down to a ban on conducting transactions using cryptocurrency and does not mean that the XMR to EUR exchange rate will become fixed. It aims to reduce opportunities for professional fraudsters and maintain security in this new economic space. In addition, regulation promotes the development of a culture of using digital assets in everyday life, making them more accessible and convenient for everyone.