The rise of blockchain has pushed cryptocurrencies to the forefront and enabled them to reach more people every day. Crypto space mass adoption has been visible with currencies like Bitcoin and Ethereum, others failed.
Bitcoin accumulation has created an abundance of wealth for those who own it. While Ethereum has provided business opportunities via creations like smart contracts. There are cryptocurrencies like Dogecoin, SpaceBit, and, Ethereum’s DAO that failed quickly after the launch. Due to unclearly mapped progression paths, bad publicity, security breaches, and unethical behavior.
Many people believe the reason for these shortcomings is the absence of regulations and frameworks that prevent bad business and malicious behavior. The continued ability to conduct all these activities in the sector, unchecked, has resulted in the crypto market being seen as a space that lacks regulation. This begs the question: does blockchain mass adoption hinge on the creation of relevant and forward-thinking legislation?
The primary concern for a suitable legal framework that could offer a long-term solution is the safety of all participants and their assets.
A large part of the crypto and Defi space’s appeal lies in the absence of a central governing institution. That means that there is no single, relevant entity to regulate the legal aspect of crypto transactions.
It seems that for the crypto space legal standard provision may be necessary to bolster mass adoption. The same way quality blockchain and identity management solutions are essential for providing a seamless access point to blockchain-based services.
Countries all across the world are now accepting Bitcoin and other cryptocurrencies. And that they need to move forward with adjusting their legal and financial systems in the same direction. China is actively working on creating a national strategy that will enable crypto mass adoption. Even though it is currently limiting its citizens in the scope of their crypto transactions.
European Union & UK Regulations
The European Union is also working towards setting up a universal legal framework for all the members. Some countries that have growing crypto users have created laws that fit best with their own specific national systems.
And for crypto mass adoption – the sooner the better.
In the UK, for instance, there is a question of regulatory clarity since all legislation regarding companies engaging in crypto activities falls under existing guidance and there is no statutory obligation for them. This guidance refers to FCA-regulated entities following already existing wide range guidance requiring these companies to submit an annual financial crime report to the FCA and an obligation to report any suspicious activity. The scope is not comprehensive. There is ambiguity as to the precise activities referenced for making crypto space legal and much is open to interpretation. Clearly, in the UK, there is still a great need for clear compliance obligations for market participants.
United States Regulations
The US is making strides in the right direction by launching a new regulatory framework for payments and cryptocurrency companies. With this new initiative, regulators from 49 US states have agreed on a single set of supervisory rules that will “ensure compliance with regulations on anti-money laundering, cybersecurity, financial condition, and other areas”.
Having in place globally enforceable legislation would push forward blockchain mass adoption by resolving potential multi-jurisdictional issues that may arise between users from different countries participating in transactions on the same blockchain.
Taxation, the issue for token issuance and Defi dapps users, as well as the infringement of intellectual property rights and the steps necessary to entrench value in dapps, would also need to be regulated. Special attention is required for anti-money laundering efforts and identifying the origin and uses of the assets in circulation.
For mass adoption of blockchain technology, lawmakers would need to make a shift in regular operational channels. While resisting the urge to limit it within the confinements of traditional financial and legal institutionalization.
Once these hurdles are overcome then it seems that we can all expect massive changes. All types of monetary means are created, owned, spent, and ultimately, perceived in our future. And the future has already started – all we need is commitment and time.
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