Rules are essential in this world. Try to imagine living without laws or regulations. Each person would do what they wanted, and there would be consequences for their actions. Anarchy and disorder are oppressive because only a few will benefit from such a system.
Although our ancestors lived without a governance structure, we can look back and agree that humanity did not reside in perfect harmony. Nowadays, there is harmony between regions thanks to rules and regulations. A code of conduct to be observed provides acceptable standards for society and provides an environment conducive to development. It would be difficult for communities to live in peace if there were no rules to follow. People would fight for resources, that’s why we need regulations to coexist with others.
In addition to the rules establishing the basis on the right and wrong things to do, it is necessary for safety. Whether it is a product or service industry, there is some sort of regulation. The extent to which the government establishes the legislation will depend on the magnitude of the risk. You will find more laws to govern particular industries like food, health, education and transportation than in other sectors. If the necessary measures are not taken, the public risks receiving substandard services and unsafe products.
Yet, untrained and unqualified people would pose as professionals taking advantage of unsuspecting consumers. In the example of the health and food sectors, unregulated products would have devastating effects, including death. Thus, enacting laws to regulate the sectors is a good thing and has a positive impact on the industry. Every industry must go through a phase where stakeholders and governments develop strategies to control their operations. This, in turn, leads to the evolution and stabilization of the industry.
Opinions are divided on the desirability of some form of regulation for the crypto industry. Since its introduction, it remains unregulated and offers loopholes for fraudulent people to explore. Some stakeholders argue that regulating the industry will go against the spirit of establishing digital currencies: parties would prefer things to stay the same.
On the other hand, others think that it would be the right decision for the consumer even if it risks slowing down the development of the sector. Despite calls to make the industry independent and inaccessible by government agencies, this should not be an excuse for fraudulent activity. There are already suspicions of cartels and dishonest businessmen using the platform to launder.
They take advantage of the sector since there is no regulation. Viktar Prakapenya’s view is that the cryptocurrency industry needs to be regulated and thinks it would be best to consider the positive impact of this decision on the industry. It will provide a suitable platform for every investor to take advantage of the industry and weed out fraudulent individuals in the market.
Although cryptocurrency has been around for several years, people are skeptical about its future impact on the world. The industry has been stalled for a while now, and that’s mostly because it’s unregulated. It would be impossible for digital currency to grow further if there were no regulations in the industry.
For example, several countries have banned Binance, a cryptocurrency trading platform in their jurisdiction, due to complaints of money laundering and tax evasion. It would be better if stakeholders accepted the change in the form of industry regulation. Without setting the rules for service providers to follow, the sector will not integrate or compete with other financial instruments.
If left unregulated, cryptocurrency will remain in the shadow of the financial instruments offered by regulated institutions. The view that the absence of government regulation is necessary to maintain crypto freedom is inaccurate. On the contrary, the rules will enforce it, and we can see this in the example of technology industries regarding data privacy.
Companies were acquiring and using user information without consent, and the need to regulate the industry arose. Brands would choose what they would do in the absence of regulations and standard operating procedures. This required strict laws and penalties for companies that violated data protection laws.
Legislation would have been lenient if industry players had done the right thing. Now, tech companies have no choice but to comply with the law. Therefore, it is in the interests of cryptocurrency industry stakeholders to work with regulators to enhance the freedom they envision in the sector.
The assumption of cryptocurrency industry players that the sector can remain unregulated will be their downfall. It would be impossible for the industry to grow further, which would affect its workers, partners and users. Since governments will eventually make efforts to regulate any industry, things will likely be different in the future for crypto service providers.
Rather than waiting for this to happen, it would be better for brands to take the initiative to initiate the process. Pioneers are the most adamant about industry regulation and are the ones who suffer the most when it happens. Viktar Prakapenya advises industry players to be on the front line to protect their operations by working with the regulator. With expert advice on the matter, there will likely be issues with the legislation established to regulate the industry. Some of the recommendations made by regulators are likely to be controversial, but compliance will be mandatory.
It is not a new phenomenon to have an unregulated industry. When the Internet was introduced to the world, few countries had legislation to regulate its use. Nowadays, you can find internet usage laws in most countries of the world. The cryptocurrency industry will experience a similar thing regardless of resistance to its regulation.
It would be preferable for the relevant actors to lead the process as this will ensure that the laws take into account the needs of each stakeholder. Lawmakers will pass a law that is unfavorable to companies in the crypto industry without the correct information. But discussions with legislators and government authorities are the best option. All stakeholders involved in crypto mining and processing should contribute to regulation.
Although cryptocurrency is unregulated in Europe, countries are taking steps to enact regulatory laws on the sector. There is currently a proposal for European lawmakers to consider how to protect crypto assets, which will change the way the industry works.
It is in the mandate of the stakeholders and in their interest to help parliament craft the best law in the crypto market. It will be part of the European digital finance strategy. The initiative will streamline the industry and weed out those who undertake illegal activities through the platform.
Researchers and other global organizations interested in cryptocurrency help service providers with the correct information about industry regulations. Due to the merging of technology and finance, FinTech players play a role in educating the parties involved. Entities see the potential of the industry and the ideal regulatory framework. They believe that there must be trust between all players for the rules to bear fruit and promote market growth. It will determine whether stakeholders comply with them and adopt them in their operations. Nevertheless, there is a need to take a holistic approach to the regulatory framework and consider the impact of crypto mining on the environment. Including the requirement to use sustainable techniques in the process will help protect the environment for future generations.
Even though crypto pioneers are innovators and don’t like to work by rules, the prospect of cryptocurrency regulation shouldn’t be threatening. Those who are afraid of change may worry about their future profits if the government regulates the industry. Remember that fear can hinder growth. Lawmakers do not aim to harm businesses, but to create the best environment for all players. Moreover, the government is not against financial gain as it understands the impact of cryptocurrency on the financial sector.
According to Viktar Prakapenia, the ideal regulatory framework should encourage investment and promote industry growth. This will stabilize the cryptocurrency market and protect investors’ assets. Therefore, industry regulation is not bad as it eliminates the manipulation of external entities. On the contrary, it increases public confidence in the digital currency and promotes the growth of the industry.
About Viktar Prakapenya
Viktar Prakapenya is the founder of VP Capital, an investment firm specializing in FinTech and Blockchain companies. The entrepreneur developed successful software companies and sold them.
Viktar Prakapenya has been instrumental in developing innovative and cutting-edge technology. His expertise covers different areas such as business, information technology and law.