The Impact of Global Regulations on Cryptocurrency

The impact of global regulations on cryptocurrency

In recent years, the cryptocurrency market has experienced rapid growth and consumer recognition. However, while more and more governments are starting to take note of this new form of currency, the regulations have started to emerge to shape its future. In this article, we will explore the impact of global regulations on the cryptocurrency industry.

Introduction: A History Memory

Cryptocurrencies like Bitcoin, Ethereum and others were around 2009. At first, they considered a novelty or curiosity. However, in 2014, the first major regulation was brought to Switzerland by Switzerland Market Market Supervisory Authority (FINMA), which prohibited the use of anonymous payment methods. Since then, several countries have followed suit, notably Singapore, Japan and South Korea.

** Why regulations?

Governments around the world regulate cryptocurrencies for several reasons:

• Safety : Cryptocurrencies rely on complex mathematical algorithms to secure transactions, making them vulnerable to hacking and other forms of cybercrime.

• Volatility : The value of cryptocurrencies can fluctuate rapidly, which has made concerns about market volatility and potential losses for investors.

• Lack of regulation : Undocately appropriate supervision, the cryptocurrency industry was in the grip of illicit activities such as money laundering and terrorist funding.

Key regulations: a chronology

Here is a brief overview of certain key regulations that have had an impact on the cryptocurrency market:

• Fincen (USA) Act (2010) : This American law obliges financial institutions to report suspicious transactions, marking the start of American regulations.

• Switzerland Secrecy Law (2014) : payment methods anonymous prohibited in Switzerland, ending anonymity on the main online platforms.

• Singapore payment system (2018) : Singapore has introduced new regulations required exchanges and cryptocurrency merchants to register with the Singapore Masy Authority (Mas).

• Japan’s Cryptocurrency Act (2020) : Japan has introduced a regulatory framework for cryptocurrencies, including requirements for exchanges to contain customer data and implement anti-flowage measures.

• The new South Korea payment system (2021) : South Korea has introduced new regulations requires cryptocurrency exchanges to obtain licenses from Korea financial services (KFS).

Impact on industry

The introduction of global regulations has had a significant impact on the cryptocurrency industry:

• Costs of increased compliance : Companies must now implement supplements regulatory systems, which has resulted in an increase in compliance costs and potential losses.

• Changes in commercial models : Cryptocurrencies are no longer considered as an investment or a speculative asset; Instead, they have become a legitimate way to carry out transactions.

• Rise of Compliance Agencies : Governments have established specialized agencies to supervise the cryptocurrency industry, such as the American Securities and Exchange (SEC) and MAS commission.

Conclusion

The global regulations on cryptocurrencies are there to stay, shaping the future of this new asset class. While some maintain that the regulations stifle innovation, others consider it a necessary measure to protect consumers and prevent activity. While the cryptocurrency industry continues to grow, regulatory organizations will play an increased role in guiding its development.

References

• Supervision authority for the Swiss Financial Market (Finma). (2014). New regulation for cryptocurrencies.

• The United States Department of the Treasury. (2010). The Coinage Act of 1965.

• Singapore monetary authority (Mas). (2020). Payment on the payment system in Singapore.

Chronology

• 2009: Bitcoin is launched

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