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What should the EU regulations for the cryptocurrency sector look like?

There is always an option. The cryptocurrency industry is built by a community of freedom-loving, tech-savvy people who have wanted to make a tremendous impact on payments since the inception of the banking system. And he nailed it. Blockchain implementation has made it possible to begin progressing beyond traditional finance as well, and many global companies take advantage of this for their operations.

After a decade of growth, followed by hopes, disappointments and the rise of new directions, the world has split into two camps. One always fought for independence, while the other lauded the party, known by some as the watchdog rule.

How can one get the most accurate and true evaluation? Let us analyze the pros and cons of the rules to understand the complete picture.

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In olden times, when bitcoin was a somewhat dubious joke-like invention, thousands of people used to buy it. a few slices of pizza or even buy one used carhandjob no one thought it could ever grow trillion worth industry.

Well, now things are different. Early adopters became billionaires, later – millionaires, and even casual investors have enjoyed skyrocketing returns on investments from 2020 in the form of stimulus checks. made some people rich. And we know very well – where is the money, there is fraud and a set of laws to protect people from it.

Last month, as BTC set its new record, Coinbase CEO Brian Armstrong Told CNBC That regulation is one of the biggest threats to crypto. The chief executive of Coinbase explained that with the advent of the Internet, many countries also feared its growth and tried to control the flow of information. China has come a long way in this regard, yet is trying to monitor the Internet to the best of its ability.

In fact, cryptocurrencies have given rise to a new industry direction in the financial markets. Back in 2017, the global securities market capitalization peaked at $40 trillion. Thanks to the advent of computers and the Internet, capitalization in this field has grown significantly in 15 years, showing a 10-fold increase!

Bitcoin’s rising star helped popularize these assets among a wider audience. Kraken Exchange was one of the first cryptocurrency exchanges founded in 2011 in San Francisco. Earlier in 2011, Mt. Gox (Mt Gox), a giant player at the time, began operating with close to half the transaction volume in the bitcoin network. Cryptocurrency exchanges differ from stock exchanges in their principles, but their essence is the same – providing services for trading assets.

Stock exchanges today outperform cryptocurrency platforms when it comes to insuring investor accounts and brokerage companies. However, when compared to the stock market and forex, cryptocurrency exchanges have an undeniable advantage in the form of access to data, high volatility and easy access to trade. However, since such exchanges are not regulated in any way when making a deposit, there is a risk of complete loss!

Companies registered in the European Union or the United States provide tens of thousands of dollars of insurance for customers’ deposits in the event of the organization’s bankruptcy and other unforeseen circumstances. Therefore, the state, not the company, is responsible for safeguarding the funds. Cryptocurrency exchanges cannot offer this as of now. Hacker attacks, unscrupulous workers and rugs are problems that have arisen in the past and still remain at risk.

There are countless examples of downsides when it comes to the loss of money in the crypto sector. Mt Gox and Quadriga CX are just tips to this iceberg of fallen investor expectations. Also, in the absence of regulation, becoming a subscriber to such an exchange is possible only by having an email. To trade in the stock market or forex, one will need to confirm their identity and place of residence by providing a number of documents. Naturally, government regulators must follow procedures that create some degree of inconvenience. The profession of a trader is fraught with risks that a trader tries to minimize losses if trading is his main source of income. Therefore, it is unlikely that investors will actively invest in a new sector before the guarantee is provided.

Volatility is still in favor of cryptocurrencies. Every day, new coins appear in the market and experience a level of development that did not exist at all in the stock market or forex. The token market has weak liquidity compared to the stock market and forex, where the capitalization is measured in trillions of dollars, which is ten times the capitalization of cryptocurrencies. Therefore, as long as there is no such regulation in this market, the liquidity, accordingly, will be at a low level, which will lead to a sharp jump in the price.

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The cryptocurrency sector is booming globally, but acceptance and regulation are different in some parts of the world. Why is it important for the EU to have regulation for crypto at the supranational level?

There is no denying that the EU is very strict and conservative towards innovations. Some of the views expressed by Eurobank chief Christine Lagarde, mentioning that the ECB will not issue a digital euro in less than five years, prove that the state is lagging behind in cryptocurrency adoption.

On the other hand, fraudsters have less chance of operating their illegal schemes and fooling customers. By shaping a new AMLD framework every few years, the EU watchdog aims to make the continent the safest harbor for digital asset clients.

One of the most successful players in the EU league is currently STEX, a fully compliant spot crypto exchange supporting all European AML standards. The platform offers convenient solutions and a wide range of trading pairs to provide an unmatched trading experience. STEX is currently supporting over 400 different cryptocurrencies and users can buy digital assets using Visa and MasterCard and SEPA, Bancontact iDEAL payment systems. operates under the platform License Estonian regulator and compliance With KYC/AML procedures.

“The world has seen many examples of extremely destructive activity on unregulated platforms. Emerging industries need regulation to mature and attract more customers: mainstream users will be more eager to learn with financial giants about their Funds and privacy have better protection”, – CEO and Platform Founder Vadim Kurilovich Commenting on the development of the legal framework in the European Union, he said.

VK also warns that due to the fact that many exchanges are not regulated in any way when making deposits, there is a risk of its complete loss, while there is no insurance.

The last examples of the constraints of the crypto world perfectly show that there is less room for cybercriminals in the modern world. The importance of the rules will increase as the objective of this activity is to shelter the customers from various rising cases of frauds. When it comes to critical point everyone wants security and there is only one way to achieve it. Never mind, industry fines have already taken their course, and over time no other forms will appear. Do your best for yourself and make the right choice. Be on the side of the light.

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Avinash is a blogger, Enterprenuer, marketer and author. He is very good affiliate marketer and Product Reviewer.