With so many global attempts to regulate cryptocurrency, it seems fair to assume that someone, somewhere will eventually get their way, and according to International Monetary Fund chief Christine Lagarde, that time may be arriving sooner than we think.
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In a recent interview with CNN, Lagarde said that anyone who still believes regulation is out of the question isn’t being realistic. She says a time will come when all digital currency will fall into government hands, and crypto activities will be monitored very carefully.
“It’s inevitable,” she explained. “It’s clearly a domain where we need international regulation and proper supervision. There is probably quite a bit of dark activity in cryptocurrencies.”
For several months, crypto enthusiasts have sat back and watched helplessly as regulation tactics like threats and unofficial policy leaks have been deployed overseas, via nations like South Korea and China. In truth, the results haven’t always been bad. Many, including the Winklevoss twins of The Social Network and Gemini fame, now see regulation as more of a booster than a problem, and the prices of various cryptocurrencies have even reflected that.
This newfound attitude likely stems from last week’s congressional hearing in the U.S., where members examined the cryptocurrency market to see which activities could be monitored and regulated. Bitcoin fans even had something to cheer about towards the end after CFTC chairman Christopher Giancarlo explained that he viewed cryptocurrency as a strong asset.
Following this alleged support, bitcoin quickly rose to about $9,000, though it didn’t take long for another slump to set in. At press time, bitcoin is trading at approximately $8,400.
But it was clear, when all was said and done, that regulation may potentially be unavoidable, and Lagarde seemed to confirm this. She said that as the cryptocurrency market continues to grow, government officials can’t help but pay closer attention. While they can’t stop traders from getting involved, they can warn newcomers about potential scams and take what she calls necessary action to prevent missteps and future fraud. As Bloomberg reported:
“We need to move to regulations of activities, not entities, because it’s not going to be about the banks, and it’s not going to be about the insurance,” she stated. “We have to anticipate where the next crisis will come from. Will it be the shadow banking? Will it be cryptocurrencies rising to the sky? Asset prices have gone up massively; durably, and we all agreed, at that time, that there had to be a market correction.”
Other officials who feel cryptocurrency regulation is near include U.S. Treasury Secretary Steven Mnuchin. Speaking at a recent conference, Mnuchin explained to his listeners, “We encourage fintech, we encourage innovation, but we want to make sure that all of our financial markets are safe and aren’t being used for illicit activities.”
Do you feel regulation could lead to positive outcomes? Or does it defeat the original purpose of crypto? Post your comments below.
Images via Chicago Tribune, Bitzamp