Everyone is buzzing about the latest crypto developments; learn here about its future
When the year 2022 arrived, cryptocurrency investors were nervous. Bitcoin (BTC -0.85%) and Ethereum (ETH -0.93%) were up 61% and 409%, respectively, during the previous year. However, the previous enormous increase in 2017 was followed by an ice bath in 2018, and the top coins began to trend downward in November 2021. Was the cryptocurrency market due for another dramatic drop? In the spring of 2022, the mainly bullish market momentum of 2021 was overtaken by negative patterns. The stock market fell due to rising inflation, Russia’s invasion of Ukraine, and other macroeconomic issues.
In a best-case scenario for 2023 and beyond, regulators worldwide may agree on a worldwide framework for cryptocurrency regulation. However, such is improbable today, given that international attitudes on cryptocurrency range from “Bitcoin is an official currency” in El Salvador and the Central African Republic to “Crypto transactions are illegal” in China. A global agreement on the subject needs to be revised in the immediate terms.
Federal crypto rules, however, are progressing. The U.S. Treasury Secretary Janet Yellen and Gary Gensler, head of the Securities and Exchange Commission, lead a highly skilled team assembled by the Biden administration to guide the cryptocurrency regulatory process. Yellen has been monitoring the market for years, but occasionally with skepticism. In 2018, Gensler lectured at the Massachusetts Institute of Technology on subjects related to cryptocurrencies, including Bitcoin, blockchains, and other issues.
A functional system may be built for investors, consumers, cryptocurrency firms, and traditional banks if highly informed individuals set the tone for future laws. Knowledgeable regulators will be aware of significant concerns like the distinctions between a value storage system like Bitcoin and an advanced ledger with smart contracts like Ethereum. Congress proposed several crypto regulatory measures in the first half of 2022, but the bureaucracy moves slowly, and this subject requires some serious thought and study. Cryptocurrencies may become widely used by American customers when the government develops a legal framework and taxation structure. However, even though El Salvador and the Central African Republic made Bitcoin legal money in 2021 and 2022, the United States will wait to follow suit.
However, many more merchants will probably start taking payments in digital currencies resembling cash, such as Bitcoin, Litecoin (LTC -1.33%), or Dogecoin (DOGE 0.57%), a clone of Bitcoin. The widespread use of cryptocurrencies should encourage governments and regulatory bodies to act more quickly and be advantageous for blockchain systems. Over the following several years, the procedures will spread across the cryptocurrency sector. Investors hate uncertainty, so even an excessively rigid regulatory structure would likely improve the current shoddy monitoring.
Delays to a better future may occur in several ways:
- In the next years, policymakers can procrastinate and fail to create an effective regulatory framework.
- They could determine that money like Bitcoin and Litecoin is exclusively used by criminals and evil people and that none of such behavior belongs on American soil.
- Retailers can object to the volatile value of digital currencies and demand that customers pay with cash or credit cards in the old-fashioned way instead.
- A sudden wave of security lapses might damage the public’s confidence in digital currencies, failed technological platforms, and other security issues
In any of these scenarios, the digital currency revolution might be delayed by several years. And if it occurs, it would look quite different from the sea shift that was sparked by Bitcoin in 2021. In the long run, it appears improbable that any country or set of governments would completely end the cryptocurrency concept. Still, they may stifle it and influence the ultimate product in many ways.
