The idea of regulating the blockchain and cryptocurrency ecosystem and other decentralized technologies seem to hang on a delicate balance. What would be an elusive meeting point between regulatory bodies and the decentralized community is a major reason why an acceptable regulatory framework is yet to be achieved.
Regulatory concerns over cryptocurrencies revolve around consumer protection, market integrity and money laundering, among other factors. However, the emergence of decentralized technologies serve to eliminate numerous malpractices that encourage unhealthy and lopsided coexistence within communities.
Something Has to Give
Currently there are a number of isolated regions where cryptocurrency activities are being regulated. Some of these regulations involve extreme measures like outright bans or very stringent operational conditions. This often creates the feeling that significant and valuable innovations are being slaughtered on the altar of consumer protection.
The wait can’t go on for too long, and something has to give. Despite the decentralized ideology surrounding blockchain technology and cryptocurrencies, developing events strongly suggest the imminent regulation of the ecosystem, at least to a reasonable extent. Mainstream application of blockchain technology seems inevitable, therefore a popularly accepted system must surface sooner than later.
“There are many obvious benefits to having some level of oversight enter into the ‘Wild West of crypto’ and one of those is cleaning up the number of poorly constructed ICO’s” – Jason Cassidy
Founder of Helium Chain, Jason Cassidy acknowledges this development as a delicate scenario that is yet to be resolved.
“It is indeed a delicate balance ensuring these decentralized technologies are allowed to flourish while simultaneously fostering positive traction with the regulatory bodies, says Cassidy. “This brings in a level of legitimacy and trust, forging the path for mainstream adoption”.
Everyone Needs to Get Involved
Cassidy explains that practitioners in the blockchain and decentralized technology ecosystem are doing a good job by educating the regulatory bodies so that sensible frameworks can be put together to streamline many of the on and off ramps for the sector. He notes that having AML and KYC does put a greater burden on the businesses themselves in ensuring a level of transparency as involved in the process. However, without these basic steps being made, Cassidy notes that the reputation of cryptocurrencies will suffer due to being outside the purview of many regulatory bodies.
At the same time, he elaborates that too much of anything is never good and this is why a balance must be struck so that innovation is not unduly stifled by regulatory burden.
He continues by noting that working with the regulators has been a good thing in this case as a compliant standard has been created for releasing tokens while also finding common language on what constitutes a security token versus a utility-based token.
This will continue to be one o f the most important stories in how cryptocurrency becomes a part of the collective unconscious of our planet. So far, so good.
Iyke Aru is a seasoned author and educator in the blockchain and cryptocurrency industry. He has been in the business of crypto content writing for many years with thousands of his articles across several platforms on the internet. Iyke is based in Nigeria where he stands out as one of the most informed and credible figures in the cryptocurrency industry. Outside blockchain and crypto, you will most likely catch Iyke playing or discussing football with friends and family.