Industry professionals and CEOs of blockchain companies are clamouring for regulators to clarify the legal status of cryptocurrencies to open up innovation and help ‘smart money’ to move into the space. Thailand has shown how it can be done even if their policies are not crypto-friendly enough.
Regulation Will Encourage Growth
Regulation is often given a bad press but in light of the six-month bear market defining 2018, it appears that innovation is waiting on regulatory clarity. During London Tech Week, the common theme was that the industry wants clear regulation.
“Concerns around volatility, lack of liquidity, and regulatory uncertainty were more than enough to prevent the so-called traditional smart money from entering the arena.”
Coinbase UK CEO made a speech at the Blockchain Summit on June 13 in which he said that the industry needs to work with current financial institutions and educate them before we can achieve a crypto ‘utopia.’ Zeeshan Feroz, UK CEO of Coinbase, told NewsBTC:
“From a government point of view, we should be engaging with the space and looking at how we facilitate it. The biggest step at this stage is regulation, give businesses some certainty and give them a framework to operate within that will help grow it.”
A lot of ICOs have banned U.S. citizens from participating due to a lack of clarity over whether or not they classify as securities. Monaco VISA told U.S., India, Hong Kong and Singapore citizens that they are excluded due to ‘excessive regulatory risk.’ Rather than risk engaging with these markets, ICOs are just enforcing blanket bans to protect themselves, missing out on further funding and more development of the industry.
Speaking at BitcoinCRE on June 14, the founder of CPROP, Sandy Selman said: “We decided to use a tradeable entity. If it became a security it would kill our business. We decided not to take any U.S. money to not deal with the problem.”
Governments Can Regulate Crypto
Thailand has shown that governments can provide clear regulation on cryptocurrencies. In May, it enacted a regulatory framework for ‘digital assets and digital tokens.’ The bill sets out requirements for ICOs to register with the Thailand SEC to make sure that they comply with current laws. Although the taxes are currently quite high, it proves that governments can successfully regulate the industry.
In order to achieve the same clarity, the U.S. needs to decide which bodies are regulating cryptocurrencies. Recently, the SEC cleared up a few questions and confirmed that Ethereum is not a security but the IRS has deemed it property, and taxable. In response to the confusion, the state of Florida has created the position of a ‘crypto czar’ to help make state-specific regulations.
Across the globe, other countries need to speed up their decision-making processes. In Europe, the UK established a task force back in March and the European Commission launched the EU Blockchain Observatory and Forum in February. However, no regulation has yet been made apart from an anti-money laundering agreement by the EU.
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