Cryptocurrencies have finally reached a stage where they can change industries through transparent decentralised ledgers. With cryptocurrencies like Bitcoin and Dogecoin seeing a 700%+ rise in the past year, people are welcoming the time for regulation. Even though some governments have passed laws to increase the financial security of cryptocurrencies, the big question remains, why should cryptocurrencies be regulated?
Should Cryptocurrencies Be Regulated?
Security and Exchange
The critical issue that initially prevented many people from investing in Bitcoin and other cryptocurrencies is the lack of any security. The framework itself ensures asset security, but the lack of financial security made some people nervous.
Commodity Futures Trading Commission
The commodities trading commission recognises Bitcoin and other cryptocurrencies as commodities and not securities. This poses a slight problem for the regulation of cryptocurrencies.
The US Government’s Stand on Cryptocurrency
The US Government and the SEC is, in general, welcoming towards cryptocurrencies. Regulating Bitcoin and other cryptocurrency and integrating it into the country’s financial architecture is the responsibility of both the government and the traders. Some financial institutions and banks are adopting cryptocurrency lately. Considering the rapid growth and innovation in the cryptocurrency space, is it best if the government regulates it?
Australia’s Current Stand on Cryptocurrency
Australia is great at adopting new technologies, however sometimes they can be slow to act. Fortunately, for Bitcoin holders in Australia, the ATO (Australian Tax Office) has moved swiftly to rule out Bitcoin as an Australian currency or foreign currency. Instead the ATO considers Bitcoin as an asset which is subject to capital gains tax, based on your tax classification. Considering this, it is a good idea to consult your accountant to find out any tax classification or implications before investing.
Tech Startups and Initial Coin Offerings
Many tech startups are trying to take advantage of Bitcoin and the cryptocurrency market and get Initial Coin Offerings instead of traditional funding. ICO or Initial Coin Offerings is when a company promises a future digital token in exchange for funds.
Even though there are different opinions among users on whether cryptocurrencies are securities, a lot of good coin issues did meet the Howey test. Since ICOs use the promise to raise capital, they are considered securities.
How Would Regulation Help ICOs?
Unfortunately, we see a lot of pump and dump schemes lately and companies raising way more than they need with ICOs. This did bring some bad light to the industry and put crypto in the sights of the Australian Government and ATO. Since cryptocurrency operates on a different level with different policies and regulations, the companies using ICOs have more freedom than many others.
By implementing new regulations on cryptocurrency, the government can help bring in better investors. It doesn’t completely eliminate the risk, but it should reduce it by a great deal. We may also see good exchanges and better policies in the ICOs if there is proper regulation in place.
Impact on Bitcoin and Coin Value
Cryptocurrencies are not the most stable investments in the market. It is best to describe cryptocurrency as high risk-high returns due to their volatility. With proper knowledge of the markets, you can make a million or lose the same. In fact, there are some crypto millionaires out there that recognised the financial potential and market gains of cryptocurrencies.
By regulating cryptocurrency, we may see a surge of new investors in the future. Regulations can make the cryptocurrency a lower-risk investment, thus attracting new investors and agencies. The one reason for the volatility of cryptocurrency is the lack of proper rules.
How Would Regulations Stabilise Bitcoin and Coin Value?
As there is no financial security, a lot of people usually panic sell a token whenever they see a dip, as seen in the case of DOGE coin recently.
A better-regulated cryptocurrency means a better market regulation and less cryptocurrency volatility. Market manipulation is another reason for more regulations. If the US Government along with the SEC and other countries such as Australia and European countries managed to impose regulations on cryptocurrency, the crypto industry would be able to face much of the market manipulation.
What are the Effects of Current Regulations on The Value of Bitcoin?
Even though certain regulatory policies are in place now, the value of Bitcoin is not impacted much by them. We still see some market manipulation. This is driving a lot of users off the exchanges. It is of the utmost importance to ensure financial safety to the users to help the general public.
Why Use Zipmex for Bitcoin and Digital Asset Purchases?
Zipmex is a digital asset platform that sells Bitcoin and other cryptocurrencies such as ETH, USDT, USDC and more. It is faster and simpler to use than numerous other cryptocurrency exchange platforms in the industry as the platform has access to high liquidity pools. You can buy, sell and trade cryptocurrency tokens, including Zipmex’s new native token – ZMT – on Zipmex.
The one thing all cryptocurrency exchanges need is regulation and good policy coverage. With Zipmex’s regulation framework, you can be certain that there is no fraud in the network. Zipmex is currently applying for a Payment Services Act license with the Monetary Authority of Singapore, which it currently has a license exemption from, as well as in Indonesia. It is fully regulated in Thailand under the Securities Exchange Commission (SEC). and is one of the most secure exchanges for Bitcoin and other cryptocurrencies such as Ethereum and XRP.
The regulation of digital assets on Zipmex guarantees the security of your assets. Zipmex also has an insurance policy for all the users’ assets covering up to 100 million USD by BitGo. With Zipmex, you will be able to buy and trade numerous digital assets without much trouble. You can also withdraw your money (with a choice of 5 fiat currencies – USD, SGD, AUD, THB and IDR) from the platform at any time. Users can both deposit the money and withdraw it digitally at whatever price they wish, thanks to modern technology.
With Zipmex, you will have numerous crypto investment opportunities to grow your portfolio and get in on the action on a global scale.
Using Zipmex is pretty simple, and new investors can easily understand the intuitive UI. Zipmex has a strict verification policy. You can rest assured that the buyers and sellers on the network are good actors. There are numerous portfolio growth opportunities in Zipmex.
Final Thoughts on Cryptocurrency Regulation
We see more than a billion cryptocurrency trades every day. Most of the transactions are happening through un-regulated agencies, so it is our hope that the SEC steps in to regulate the crypto industry in the U.S. Trading cryptocurrencies and other assets. With the great potential of blockchain technology and proper regulation, crypto can undoubtedly reach great heights.