Bitcoin

SEC Chairman: ‘No Bitcoin Trading Without Proper Crypto Regulations’

Bitcoin and other cryptocurrencies are a very different asset class. Consequently, governments have not been able to precisely figure out the best way to handle cryptos. While regulatory bodies struggle to bring about suitable crypto regulations, the U.S Securities and Exchange Commission (SEC) president remarked against bitcoin. According to the president, Jay Clayton, until better regulations are devised, bitcoin can not be launched on major exchanges.

Apart from crushing optimism in the crypto space, the regulatory body also warned bitcoin investors. According to the SEC, it’s better for bitcoin enthusiasts and investors to refrain from pooling in their funds until bitcoin is made available on stock exchanges.

Although, the message of abandoning bitcoin trade was delivered by Clayton in his speech at the Delivering Alpha conference, no specific timeline or future road map was shared with the attendees. Therefore, bitcoin investors are instructed to abstain from bitcoin sale and purchase.

Bitcoin itself is not available on stock exchanges but it can be bought on several crypto exchanges. Due to several disrupting nature of cryptocurrencies, governments have been highly reluctant in opening investment opportunities for locals. For example, the decision of bitcoin ETF was delayed several times is still pending.

Bitcoin is a highly volatile asset. The world’s first decentralized digital currency exploded to its all-time high (ATH) in 2017 and within few weeks, bitcoin price dropped down to almost half. After a couple of months, the digital asset lost more than 75% of its value as it hovered above $3,000.

Besides volatility, hacking and other fraudulent activities had damaged the repute of cryptos very much. Every now and then, a crypto scam or fraud is successfully implemented by bad actors in the space. According to an estimate, bitcoin hackers has more digital asset than even the creator of bitcoin.

Despite being volatile and subjected to several hacks, bitcoin is superior to other currencies in several aspects. Firstly, as the price of bitcoin obeys the fundamentals of supply and demand only, no one can predetermine or control the its price. So, the price of bitcoin can’t be manipulated for personal benefits.

READ ALSO: Crypto Survey: 41% Europeans are Counting on Bitcoin and Cryptos

Furthermore, bitcoin is a programmed currency with a limited supply of 21 million. Unlike fiat that can be printed as much as needed, bitcoin is immune to inflation. Explaining it comprehensively, Jeffery LIU Xun, CEO of XanPool, an automated P2P local currency to cryptocurrency fiat gateway, told BlockPublisher:

Bitcoin supply has an absolutely hard cap of 21 million Bitcoins, that nobody is able to change. Thus essentially limiting the supply forever. This rule in enforced in the Bitcoin code, that over 100,000 people run on their computers worldwide. Unlike fiat currencies that a single individuals government is able to print more of.

Xun explained that unlike fiat currency, bitcoin is minted all over the world by miners. Therefore, power or control of creating bitcoin doesn’t depend single-handed on some institute. However, with fiat under the influence of central banks, currency flow is managed by them.

READ ALSO: Line Brings Crypto Trading to its 80 Million Japanese User Base

Bitcoin is pseudo-anonymous cryptocurrency built on a public blockchain. Although the currency is a very secure medium for settling peer-to-peer payments, governments and banks feel threatened by it. That is the very reason they try their best to introduce regulations in order to expand their authority over bitcoin. Sharing thoughts in this regard with BlockPublisher, Benjamin Dynkin, CEO of Atlas Cybersecurity, elaborated:

As cryptocurrencies continue to demonstrate that they are not a passing fad, governments will continue to implement regulations on how to treat these new forms of currencies/ securities/ property. The US through the SEC has certainly been a leader, but we will need different approaches, as well as multilateral agreements to help further reinforce the adoption of cryptocurrencies with meaningful oversight and regulation

As mentioned by Xun, bitcoin’s immutable inflation-free nature has the potential to replace fiat. However, strict approach taken by the SEC against bitcoin will hinder mass adoption to  great extent.

READ ALSO: Chinese Crypto Mogul: We Don’t See Bitcoin as Payment System

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Fatir Malik

Electrical engineer by profession, turned into blockchain developer. Fatir contributes regularly with his insights about latest developments in fintech sector. Contact the editor at editor.opinions@blockpublisher.com

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