Cryptocurrency has been the talk of the town since its inception. Nowadays, many cryptocurrencies are available in the market. The blockchain market is expected to grow by over $39 billion by 2025. The financial sector invested over 60% in the blockchain. Additionally, by the end of March 2021, bitcoin reached over 70 million wallet users.
With the rise in cryptocurrency, new regulations are coming forward every season. As a result, many people raise concerns over cryptocurrency regulations, while others see its benefits. In the current market, the government plays a significant role in crypto regulations, thus many people are sceptical about the outcome.
Cryptocurrency exchanges are legal in the United States under the Bank Secrecy Act. Additionally, cryptocurrency exchange service providers should have a license from FINCEN-Financial Crimes Enforcement Network, integrate an AML/CFT and sanction programs, and submit reports of each record to the authorities.
On the other hand, the US SEC- Securities and exchange commission indicates that they are working towards making the cryptocurrency to be safe by applying security laws to digital wallets that can affect both exchanges and investors. Meanwhile, the Commodities Futures Trading Commission has a friendlier approach when it comes to the currency to trade publicly on exchanges.
FinCEN stated that it expects the crypto exchange to fulfill the record-keeping requirements and share the information regarding originators and beneficiaries of currency exchange.
However, the government has numerous future plans for cryptocurrency exchange. For example, in 2020, FINCEN proposed some new data collection requirements for the cryptocurrency handler who manages digital assets, DTLs, and crypto payments on private digital wallets. When implemented, the regulations will require an exchange to submit apprehensive activity report for transactions and would need non-registered financial institutions to identify themselves while transacting $3000 or more in a single transaction.
Furthermore, the justice department will coordinate with other crypto exchange agencies over future cryptocurrency regulations to ensure consumer safety and a streamlined process. Despite all the criticism, the government is keen on bringing digital currencies under their terrain to avoid destabilization of the global dominance of the US dollar and supremacy of digital currencies.
In conclusion, we can say that regulations have benefits and drawbacks as well. Many countries have implemented virtual assets that provide robust security, such as KYC, to protect user’s wallets from being hacked. This will increase investor’s confidence and increase crypto investors.