The crypto and blockchain world has remained to be highly unregulated since its inception. Owing to the absence of regulatory frameworks, a lot of negative elements and illegal activities have found ways to seep in and make their stronghold in the arena of cryptocurrencies. Even after a decade, the bitcoin world is largely used for illegal activities and scams.
But as this space is getting more and more attention from institutions and the general public, the demands for the establishment of regulatory frameworks are also growing. The idea presented forward by blockchain is decentralization and the elimination of third-parties. A trustless system where the trust is put in code and mathematics. So should the crypto market be regulated by the government?
Answering the question, the Chief Executive Officer and Founder at Mycro Jobs, André Bruckmann stated via Qwoted:
Blockchain stands all about trust. Governmental regulation is always related to the protection of our society‘s values, like consumers or financial market stability. Regulation leads to trust, and trust of investors in this space is very important. Only scams fear the regulator.
As suggested by André, trust is an important factor when it comes to the society and the investment arena. As of now, the trust regarding the crypto space is relatively low in the media and among the general public. A negative connotation is attached to the world of “crypto” owing to the illegal activities and scams linked to it.
With regulations, it is expected that more trust will be established regarding cryptos among the institutions and the public as they’ll help curb out the negative elements attached with them. Organizations are also more likely to step into this game if regulations are there granting proper protection to the investors. This will likely help the market get more mature and get more widespread acceptance.
A crypto-linked exchange-traded fund (ETF) has also not been approved by the regulatory body in charge, the United States Securities and Exchange Commission (SEC), owing to the lack of regulation and prevalence of scams. Regulations might also help pave a path for a crypto-linked exchange-traded fund.
If the world of cryptos is to get more mainstream adoption, it seems only natural that regulations should be there because they grant a certain level of security to the investors, and the protection of investors is of prime importance when it comes to these matters.