Cryptocurrency is an increasingly popular concept in the World today, and its fame is augmenting with every passing day. Simply put, cryptocurrency is the virtual form of currency that makes transactions across the globe possible. Cryptos work through the system of cryptography. The entire system is extremely safe and reliable, which is why more and more investors are inclined toward digital investments.
A lot of countries have now started to put on advantages of bitcoin and cryptocurrency. They are trying to bring it other the umbrella of some Central authorities that can check its working. In this article, we shall discuss the regulations for Cryptography that are underway.
Cryptocurrency Regulations VS Fiat Currency
Fiat currency is the regular currency that is used by the countries in day-to-day processes, be they national or International. The fiat currency is backed by the government itself and is regulated by the central authorities. It is a popular medium of exchange for the people in a country to use for their regular sale and purchase activities.
However, despite being extremely trustworthy and dependable, we can’t say that fiat currency does not come with its own set of disadvantages. This currency is vulnerable to inflation, and people depending on it are entirely get affected by the rising inflation to a massive degree. Comparatively, when it comes to talking about cryptocurrency, inflation is not an issue associated with it. Rather, it has its own significant disadvantage, which is the volatility of the market and a high level of instability.
Regulation of the fiat currency is easier than the cryptocurrency as the former is available in physical form and showcases its existence through paper bills. On the other hand, cryptocurrency is entirely virtual, and one can’t touch it as it exists in the digital world. Another major reason why a lot of people prefer fiat currency when it comes to making transactions is that there is a bank associated with the transactions, which adds to the security offered to them. However, a lot of people don’t know that transactions made in cryptocurrency are way more secure than those made through regular fiat currency. It also calls for the regulations of the cryptocurrency so people can trust it more and manage them through the bitcoin trading software.
Is It Possible To Regulate Cryptocurrency?
So the question arises; can we really regulate cryptocurrency? Definitely, it’s possible to regulate cryptocurrency but it will take some time and a lot of lengthy processes to get this done. A lot of countries have actually started regulating cryptocurrencies and bringing it under the umbrella of Central authority to keep our check on the working of the system.
Major Regulations For Cryptocurrency
The most prominent regulations that countries are undertaking for cryptocurrency are:
a. Tax Regulation
Now, this is one of the most sought-after queries when it comes to talking about cryptocurrency and the tax associated with it. Bringing cryptocurrency profit under the tax net is a great way through which the country can benefit from crypto investors. However, at the same time, it is necessary to mention here that a lot of countries have made Crypto tax free such as Vanuatu.
b. Customer Protection By The Exchanges
Crypto exchanges that help investors buy and sell cryptocurrency are of great significance. A lot of countries are bringing Crypto exchanges under their shelter by regulating them properly. This is to ensure the consumers are protected and are not violated in any manner.
Why Is Regulation Needed?
The major reason why it is necessary to regulate cryptocurrency is that there are lots of benefits associated with it, which people can’t utilize just because they find cryptocurrency risky. By regulating it, this fear will be diminished, and people will be able to enjoy the advantages connected to cryptocurrencies, such as their super-fast transaction speed, extremely low fees of the transaction, and very high level of accessibility. At the same time, it will add to the security offered to crypto users and will protect them from all kinds of fraud.
Final Thoughts
Considering the growing popularity of cryptocurrency and the increasing interest of investors in putting their money into buying digital currency, countries must regulate the cryptocurrency system in one way or the other. different countries have different ways of regulating Cryptos within their jurisdictions.
