Newer Standards to be set for Cryptocurrency Business
With Facebook entering the cryptocurrency space, there were swift and critical responses from the politicians in Europe and the United States.
Libra is all set to be launched next year. A consortium of 28 companies, which will be governing the digital currency has been formed for Libra.
Cryptocurrency regulation will be moving a step ahead during the V20 summit where representatives from several countries will be assessing the new course of legal action as proposed by the International Financial Action Task Force (FATF).
Takemoto stated, “The VASP industry recognizes the importance of clear regulation in preventing financial crime and mitigating corruption.”
While it is not clear about which Federal Agency should be regulating the cryptocurrency market, some regulation will come in to force very soon. Governments will not be willing to permit the dominance of the Facebook coin, and the governments are well aware that the digital tokens will be presenting a difficulty for the lawmakers.
While a government representative recently required that Facebook stops its processes, it is not realistic for Facebook to be doing it.
Regulators are looking to ensure that new products would not pose a systematic risk, which are for good causes mainly. However, the timeline for regulation did not keep up with the pace of advancements in technology.
While there are lots of comments about Facebook not being able to deal with criticisms and fines due to several data privacy scandals, several Democratic members feel that Facebook is already “too big and too powerful.”
Japan has set new obligations for a speculative trade, such as maintaining a cryptocurrency protection fund and more. However, it has been seen that too much regulation might backfire.
Roger Wilkins recently stated, “What we hear from industry is that the new rules may have the opposite effect to which they were intended, effectively forcing crypto transactions off the controlled platforms, which are currently one of the best avenues we have in gaining visibility over financial crime.”
Roger Wilkins, stated, “Being a former regulator, it is important to identify a balanced solution which will implement the recommendation of FATF when it comes to building the opportunity for business.”
The regulatory landscapes are shifting, and cryptocurrency exchanges will have to improve the kind of security they provide on their offerings. Stricter regulations will be imposed on how to keep passwords and private keys safe.
Several startups will have to move from being unregulated to the rank of licensed and regulated brokerages.
By STEVEN ANDERSON