The value of cryptocurrencies keeps going down. Reasons for this vary, but many experts believe that introducing regulations could stabilize the market once interest rates are restricted. However, some argue that government regulations could be the end of crypto.
Bypassing the government has been one of the most significant crypto features so far, yet only China made efforts to start regulating the private crypto marker. Other world economies seem to avoid this by introducing central bank-issued digital currency (CBDC).
However, CBDC is not likely to ever live up to the expectations and popularity of BitCoin and other privately owned currencies. As with everything involving the government, transactions will require identity reveal, especially if they are larger ones.
The rising popularity of crypto exchanges opens doors to a rise in illegal actions and financial frauds. Tax avoidance and capital controls are growing problems, especially in poorer countries that don’t have sufficient funds to do in-depth investigations.
Regulating the crypto market in a way that doesn’t compromise its very nature will be extremely challenging in the years to come. Policymakers will need to look at the broader picture, cooperate with crypto experts, and be able to think about a long-term approach to have any success.