The Roadblocks Faced Making Cryptocurrency Better Regulated And More Widely Used
Scroll DownAs much as blockchain technology and the cryptocurrency markets have developed over the last few years, there is an important aspect that has remained elusive: widespread adoption and mass circulation. While it is true that thousands of retailers around the world are signing up on a daily to accept digital currency payments, the truth is that only a small percentage of transactions are completed in this fashion.
With circulation being the Holy Grail of the digital currency world, a new organization has emerged to tackle this challenge: the Market Integrity Working Group, which is formed by executives from Coinbase, the leading cryptocurrency exchange platform, and from Ripple, one of the most circulated tokens. This group, which started operating in January 2020, is part of the Blockchain Association, and one of its first points of order is to push for more comprehensive legislation and regulation.
The current regulatory market for cryptocurrencies is too restrictive, and this has hampered institutional interest in tokens. At the same time, institutional investors are rightly concerned about the transparency and overall risk of the digital currency markets, which are still vulnerable to manipulation and extreme volatility. The new group believes that the United States Congress should take the lead in passing reasonable and fair legislation as a first step; a second step would be to enable the Commodity Futures Trading Commission to act as the practical regulatory and oversight agency.
One of the problems that this group has mentioned is that leaving digital currency regulation up to state jurisdictions is not efficient. While there is no question that each state should have the right to regulate financial matters, a framework of uniform federal laws would make it easier for cryptocurrency development teams and exchange platforms to do business.
Naturally, legislation and regulation are only initial steps to achieve the greater goal of circulation, but this is where business development teams can step in. Ripple has earned a good reputation among financial institutions because of the work that the company has done in terms of conducting tests of remittances and money transfers with financial institutions. For decentralized tokens such as Bitcoin, however, striking such business deals will be more difficult.
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