LACK OF KNOWLEDGE IN THE CRYPTO MARKET COULD POSTPONE REGULATIONS

11 August, 2022 Technology

LACK OF KNOWLEDGE IN THE CRYPTO MARKET COULD POSTPONE REGULATIONS

 

The bill that is currently created by Senators Cynthia Lummis and Kirsten Gillibrand trade Bitcoin with this app being affected in its evolution because there is a considerable level of lack of knowledge within the Senate regarding the subject. Enter to Bitcoin-Prime trading system for more information

 

It has even been postponed until next year; it is a new topic and requires evaluation, study, and analysis, to establish the necessary guidelines so that nothing is missed when presenting the final project.

 

Types of existing crypto regulations

When discussing crypto regulations, reference is made to everything related to laws, regulations, or status created around cryptocurrencies and the blockchain.

 

These regulations arise after the imperative need of governments and financial entities to control cryptographic operations; consequently, it is assumed that there are profits from these transactions, which should be subject to tax withholdings.

 

That is why various legal instruments have been created in countries such as Spain, El Salvador, Venezuela, Mexico, Argentina, Chile, and the United States.

 

The types of existing regulations are mainly focused on the fiscal area; it is there where the most significant interest in the countries is highlighted when regulating them, this with the purpose that both the purchase and sale operations of crypto actives generate an additional income for the nations. of money for taxes.

 

Although cryptocurrencies are decentralized, this has been the most common way of regulating them, which has contributed to the slowdown in the adoption of cryptocurrencies in some countries more than in others since tax rates can be quite high per operation.
On the other hand, the way to control crypto operations is also through prohibiting the use of cryptocurrencies; it could be focused on the supervision of digital processes to avoid money laundering and capital flight.

 

Importance of the Responsible Finance Bill

To date, the United States has been characterized as one of the countries with the highest adoption of cryptocurrencies as a financial investment instrument, which is negatively reflected in the country's income balances because cryptographic operations do not have any value entering the country.

 

After the price of cryptocurrencies and the collapse of Terra, the need for agencies to control and regulate crypto operations and establish the functions of the Commodity Futures Trading Commission ( CFTC ) and the Securities Commission ( SEC ) before the application of the law for cryptocurrencies.

 

The regulation will not only cover the leading digital currencies and crypto actives such as Bitcoin. Still, it will also impact stablecoins and involve this environment with traditional financial entities and the national treasury.

 

The strategy is to establish a practical interrelation between the parties so that they can function without the need to affect the financial development of any of the segments involved.

 

Areas of cryptocurrencies to be regulated

Cryptocurrencies have been characterized by being decentralized, which from a certain point is contradictory if a law is approved. However, the project has been temporarily suspended, and the constant search to establish control over crypto assets will continue.

 

Among the key areas to be subject to regulation are primarily taxation and the integration of the traditional financial system with the digital market, where banks could eliminate the anonymity of operations.

 

On the other hand, there is the big fish of cryptocurrencies, and they are none other than the Exchange; these are the main objective since they host high-value crypto operations in their databases that could leave large incomes for the country.

 

Who would regulate cryptocurrencies?

The central controller is the State, which branches into the various entities that supervise the financial operations in the country, including the Commodity Futures Trading Commission and the Securities Commission, which control the financial assets of the Stock Exchange.

 

The Central Bank cannot be left aside, which will allow the diversification of transactions with cryptocurrencies, allowing holders of crypto assets to feel protected and supported in some way in the face of a possible bankruptcy of the companies that manage crypto funds.

 

Conclusion

As expected, the digital financial market is usually speculative in all its sections, which is why at this time, with so many regulatory intentions, speculations are also generated where there are many plans. Still, actions are limited more now before a possible economic recession.

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