Everyone’s been coming up with their own future for the cryptocurrencies that we now see. Some estimate that they will shrink and disappear while others purport that cryptocurrencies will remain here for future generations and possibly dictate how we will carry out transactions in future. One hurdle that cryptocurrencies have faced in their heady and unruly developments has had to do with regulations.
Rating agency Moody’s Investors Service is expecting cryptocurrencies to be laden with regulatory demands in the short terms. The forecasts are somewhat accurate with cryptocurrency taking increased regulatory fire on day to day basis. Let us look at some of the latest regulatory enactments that have been discussed:
- The European Parliament called for more transparency of the subject;
- The Bank of Japan and the Bank of South Korea have outright warned their citizens no to participate in the crypto trade, as it may entail severe downsides;
- The Bank of Iran and the Reserve Bank of India have both banned cryptocurrencies.
It does not stop there, however. If you take a look, you will notice that other regulators and legislation around the globe are taking an equally hawkish approach against cryptocurrencies, leaving them little wriggle room in fact.
So where should cryptocurrencies go next?
Some tout the Chinese model. China is not overly fond of cryptocurrencies. In fact, it would be rather accurate to say that the country has gone so far to downright forbid it.
‘To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs‘
In truthfulness, China is well-poised to tip right into the cryptocurrency craze and benefit from it in full. However, nobody knows if this is going to pan out well for the country as such. Some suspect that China may yet to learn about how blockchain and cryptocurrencies operate, but the truth is that the Chinese dragon has already flapped its wings.
The prevailing opinion now is that China will inevitably establish its independent financial ecosystem and extricate itself from the faintest semblance of dependence on the west.
The onslaught against FIAT currency that China has undertaken is quite impressive and it may embolden blockchain enthusiasts, too. Blockchain investors in China are quite prolific. As a result, they seek outlays of their investing appetites abroad, including Singapore, Macau, and Hong Kong.
As the country marches on towards a digital national currency, investors are flocking to unicorns in the regions which have been struggling to come up with their own ICO. Many brilliant ideas have originated in the East.
Moody’s right to predict that cryptocurrencies will come under a lot of regulatory fire. And the agency has a point when it says that in all likelihood this temporary contentious point will abate as time goes by.
However, a curious rift may crop up. China will have moved towards a digitalised and centralised economy. For conformity’s sake, China will just call it ‘the economy’ but it would be nothing the like of what we in the West have.
Meanwhile, capital that flows out of China will seek to bolster unicorn companies, that will invest chiefly in the west, and possibly in Asia, if an opportunity presents itself. You will be quite interested in knowing that blockchain investment is at a peak in China right now.
Start-ups offer are quite abundant all across China and in the neighbouring countries. What the west can do to catch up to China is trying to regulate cryptocurrencies quicker and more efficiently. Regulation alone will hamper and weed out bad practices at once.
An additional benefit of having a regulatory framework is to start pondering about the future of cryptocurrencies as you see it. The regulatory watchdogs will see that Bitcoin is impractical as anything more than property.
However, the underpinning blockchain can easily serve as something much better, such as create solutions to pressing problems. Improving on cloud storage is one thing that crypto companies such as Gerano have been able to achieve.
Moody’s prediction about the future of cryptocurrencies is quite accurate. However, the West has a much more important task than simply looking after the comfort of digital chunks of gold. Deciding what to do in future so that the whole Western hemisphere won’t lag behind China would be an important stepping stone for any future development.