Markets emerge spontaneously and open up new opportunities. The number of market participants is growing and the farther, the more clearly the shadow side of opportunities – risks – is manifested. There is a need to prescribe the rules of the game and control their implementation. Sooner or later, the law comes to any market, and cryptocurrencies are no exception. The opportunity to sell XCN in itself is great, but it is much better when there is confidence in the security of the transaction for all its participants.
The popularity of cryptocurrencies is growing, the number of its holders is already in the millions. At its peak, the capitalization of the cryptocurrency market reached almost 3 trillion. dollars. Compared to traditional established markets, this is a breeze, but the industry’s growth rate has long suggested the need for regulation. The collapse of individual stablecoins and the bankruptcy of some cryptocurrency companies brought big losses to crypto investors.
In the light of these events, the first concept for the development of legislation in the field of cryptocurrencies has been developed in the United States. According to this concept, it will take into account the following national priorities:
- protection of the rights of consumers and investors.
- availability of financial services.
- ensuring financial stability.
- combating illicit financial flows.
- maintaining the global leadership of the United States in the financial sector and the competitiveness of the economy;
- development of “responsible innovation”.
How will the regulation of the cryptocurrency market be built?
Regrettably, self-regulation of the global system is possible only in an ideal world inhabited by ideal people. In practice, we live in a harsh reality among ordinary imperfect people. In addition to nobility, mercy and many other good things, there are exactly the same controversial situations, mistakes and outright malicious intent.
The concept outlines the circle of institutions that will oversee the cryptocurrency market and defines their main functions. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will deal with violators of cryptocurrency legislation. Their scope of work includes investigating cases of fraud, theft of cryptocurrency assets, intentionally misleading consumers with promises of guaranteed high profits, falsification of financial documents, etc.
The problems of cyber vulnerability of cryptocurrencies, and especially stablecoins, and their backing with real assets will fall within the competence of the Ministry of Finance.
Some cryptocurrency projects are initially aimed at reducing the cost and simplification of financial transactions and have proven their effectiveness in practice. Over time, the activities of providers of such payment solutions will also be regulated.
The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) will deal with complaints from crypto investors. The Financial Literacy and Education Commission (FLEC) will be responsible for raising public awareness of the risks of the cryptocurrency market and common fraud practices.
As part of the fight against money laundering and countering terrorism, it is planned to initiate amendments to the law on banking secrecy and other regulations that will extend the regulation of the financial market to digital assets and players in this market.
Why regulation of the crypto market is needed
Cryptocurrencies will not disappear anywhere, it is impossible to cancel or prohibit them, and it is not necessary. The best possible solution is to lead this process, make it as clear, transparent and safe as possible for all market participants.
Regulation is not a matter of banning sell APE for PHP or other fiat crypto transactions. This is a way to reduce the number of professional scammers in the crypto community and develop a culture of using digital assets in everyday life.