What should EU regulations for the cryptocurrency sector look like?

There is always a choice. The cryptocurrency industry was built by a community of freedom-loving and tech-savvy people who wanted to make a massive impact on payments since the beginning of the banking system. They nailed it. Blockchain application has made it possible to embark on developments beyond traditional finance, and many global companies are taking advantage of it in their operations.

After a decade of evolution, filled with hopes and despair and the emergence of new trends, the world has split into two camps. One has always fought for freedom while another highly valued what became known to some as a censorship regime.

How can the most accurate and honest evaluation be obtained? Let’s analyze the pros and cons of the regulations to get the full picture.

Binary world

Back in bygone times, when bitcoin was an equally dubious invention, people used it by thousands to buy Few slices of pizza or even buy used carAnd the No one thought it could ever grow A trillion . industry.

Well things are different now. Early adopters got rich, and later – millionaires, and even ordinary investors enjoyed huge returns on investments like stimulus checks from 2020. Make some people rich. And we know very well – where is the money, there is a scam and a set of laws to protect people from.

Last month, when BTC set a new record, Coinbase CEO Brian Armstrong was Tell CNBC Regulation is one of the biggest threats to cryptocurrency. The CEO of Coinbase explained that with the advent of the Internet, many countries also feared its development and tried to control the flow of information. China has come a long way in this regard, and is still trying to oversee the Internet as best it can.

In fact, cryptocurrencies have spawned a new industrial trend in the financial markets. Back in 2017, global stock market capitalization peaked at $40 trillion. Thanks to the advent of computers and the Internet, capitalization in this area has increased significantly over the past 15 years, showing a 10-fold growth!

Bitcoin’s rising star helped promote this asset to a wide audience. Among the first cryptocurrency exchanges was the Kraken exchange, which was founded in 2011 in San Francisco. Earlier in 2011, Mt. Gox (Mount Gox), a giant player at the time, started operating with a share of nearly half of the transaction volume in the Bitcoin network. Cryptocurrency exchanges differ in their principles from stock exchanges, but they have the same essence – the provision of services for trading assets.

Today, exchanges are outperforming cryptocurrency platforms when it comes to securing the accounts of investors and brokerage firms. However, when compared to the stock and forex market, cryptocurrency exchanges have an undeniable advantage in the form of data access, high volatility, and easy access to trading. 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 offer deposit insurance to customers in the tens of thousands of dollars in the event of bankruptcy of the organization and other unforeseen circumstances. Therefore, it is the state, and not the company, that is responsible for the safety of funds. Cryptocurrency exchanges cannot offer this yet. Hacker attacks, unscrupulous employees and pulling the rug out are problems that have arisen before, and the risk remains high.

The examples of meltdown are countless when it comes to funding losses in the crypto space. Mount Gox and Quadriga CX are just tips for this iceberg of fallen investor expectations. At the same time, in the absence of regulation, you can become a client of such an exchange simply by owning just an email. To trade in the stock market or forex, a person will be required to confirm his identity and place of residence by submitting several documents. Of course, government regulators must comply with such measures, which to some extent lead to inconvenience. The trader’s profession is full of risks that the trader tries to minimize his losses if trading is his main source of income. Therefore, investors are not likely to actively invest in a new area before offering guarantees.

Volatility is still on the cryptocurrency side. Every day, new coins appear in the market and experience a level of growth that has never existed in the stock market or forex. The token market has poor liquidity compared to the stock and forex market, where capitalization is measured in trillions of dollars, which is ten times higher than that 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 allow the price to make sharp jumps.

stay on the right side

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

There is no denying that the European Union is very strict and reticent about innovations. Some opinions, such as that expressed by European Bank President Christine Lagarde, stating that the European Central Bank will not issue a Digital Euro in less than five years, prove that the country is lagging behind in cryptocurrency adoption.

On the other hand, scammers have less chances for their illegal schemes to operate and deceive customers. By forming new AMLD frameworks every few years, EU regulators aim to make the continent the safest haven for digital asset clients.

One of the most successful players in the UEFA League at the moment stx, a fully compliant instant crypto exchange that supports all European AML standards. This platform offers convenient solutions and extensive trading pairs to provide an unparalleled trading experience. STEX currently supports more than 400 different cryptocurrencies and users can purchase digital assets using Visa, MasterCard, SEPA and Bancontact iDEAL payment systems. The platform is running under license Estonian regulator and correspond With KYC/AML procedures.

“The world has seen many examples of highly destructive activity on unregulated platforms. The emerging industry required regulation in order to mature and attract more customers: the average user along with financial heavyweights will be more eager to take steps to know that their money and their privacy are properly protected. Best “CEO and Founder of Platforms Vadim Kurilovich He stated to comment on the development of legal frameworks in the European Union.

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

Recent examples from the blockages of the crypto world fully show that there is less room for cybercriminals in the modern world. Regulations will become increasingly important as this activity aims to protect customers from various increasing fraud cases. Everyone wants security when it comes to the critical point and there is only one way to achieve it. No matter what, industry fines have already made their way, and no further variables will emerge over time. Do your best for yourself and make the right choice. Stay on the side of the light.

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