It has been just over a decade since bitcoin erupted out on the financial scene. But owing to being so new, not a lot of concrete regulatory frameworks are there regarding this digital asset. A lot of negative elements and scams have seeped into this market owing to this lack of regulation. So should this market be regulated? What should the governments do to remove the negative elements linked with this space.
BlockPublisher recently got in touch with the Chief Executive Officer of Swych, Deepak Jain, as he expressed his thoughts regarding this matter and bitcoin overall. Swych is essentially a a digital gifting platform that recently built on the Stellar blockchain to enable users to send, redeem, and “swych” digital gift cards without compromising on transaction speeds, security, and flexibility of the popular Swych gifting service.
- Will bitcoin replace fiat or act as a reserve currency in the future?
Deepak: “I see Bitcoin as more of a first generation proof of concept as to what could potentially replace fiat or act as a reserve currency. The concepts are there but the limitations in the design of the original concept are barriers towards this actually happening. There are several concepts inspired by Bitcoin that are progressively removing these limitations and getting closer to this eventual possibility ( the possibility of having a truly decentralized global digital currency superior in performance, reliability, and efficiency versus fiat).”
- Is it digital gold?
Deepak: “Bitcoin is definitely closer to the concept of an asset class than it is to the concept of a payment method or fiat currency replacement. However, it is not actually backed by any asset that protects the downside (beyond periodic corrections). Once again, Bitcoin falls short of becoming a true asset class whose behavior can be modeled based on macroeconomic or geopolitical factors.”
- Should this market be regulated?
Deepak: “Regulations will relate to the actual usage of the technology. Use of cryptocurrency as a capital raising methodology should be regulated. Use of cryptocurrency/blockchain as a money movement platform should be regulated albeit by a different authority. Similarly, there might be use cases for cryptocurrency/blockchain that might not need to be regulated (such as a private ledger to manage a supply chain or inventory etc…).”
- What can governments do to curb out the negative elements linked with bitcoin?
Deepak: “Regulations should be designed in such a way that innovation is encouraged and supported while still curbing out the bad actors.”
While the idea of regulation does not seem to be that bad, room should be given to the crypto world in order expand its wings properly. But then again, the negative and illegal elements are there in abundance. It will be interesting to see how things turn out to be for the crypto world as regulations roll in. The game is just getting started.