After the last episodes experienced in the crypto world, many raised the importance of speeding up to build a legal framework for Crypto.
Cryptocurrencies and regulation: Is it necessary? Those in favor of the rules claim they could help prevent excessive volatility in the cryptocurrency market. The lack of regulations has allowed large fluctuations in its value, harming investors and market stability. With proper laws, authorities can implement measures to prevent market manipulation and excessive volatility.
Additionally, regulations would be necessary in the crypto world to protect investors and users. This may encourage global adoption and prevent tax evasion and other financial crimes. The regulations must be clear, consistent, and transparent to make the crypto world safe and stable in the long term.
But what are cryptocurrencies?
A cryptocurrency is a digital asset that uses cryptography to secure asset ownership and transactions. And also to control the issuing of additional units and verify the transfer of assets. Ramiro Raposo, Country Manager of Bitwage, shared his vision:
“Although people developed cryptocurrencies to be money, I consider Bitcoin an asset. Although it would be ideal to imagine it as a currency, I find it very difficult to implement that it be used as a currency daily. But it is a way to preserve the value of our heritage as other assets such as gold have been. It has its regulations. Therefore I do not doubt that Bitcoin will follow a similar path.”Ramiro Raposo
On attempts at regulations and their possibilities in Argentina
The country’s Economy Minister, Sergio Massa, met with leaders of the leading crypto companies and technology firms. Their aim is “putting intelligence together to find ways for the State to make work possible in this matter to position Argentina as one of the leaders on a global scale.“
Raposo first referred to what is happening in the North American market. “A country that is always very active with the issue of regulations is the United States. Although the word regulation sounds strong and is not welcome by holders, many regulations can protect the investor. One of the regulations proposed in the US Senate is to regulate stablecoins so that they are truly stable and do not put investor money at risk.“
And in the case of Argentina, he maintained that our country is “very particular” regarding regulations.
“Although there is talk of regulations, it is of the utmost importance that those facing this project in the government are trained and advised to understand the crypto market. Due to the history of our country, one could suspect that there is a hidden reason for collection. Still, since the ecosystem is much more complex and decentralized than the traditional market, they will never obtain full control over cryptocurrencies.”Ramiro Raposo
Guillermo Escudero, Commercial Manager of CryptoMarket -a cryptocurrency exchange platform- also referred to the regulations.
“As in any market, state intervention always protects investors. Regulatory frameworks also generate clear rules for participants. The particularity of the crypto market is that many entities can regulate from ignorance, which is more complex. Still, because each regulation can focus on different aspects”, he indicated.“
“In general, in many jurisdictions, crypto companies tend to align themselves with the chambers that create the laws to be able to put together said frameworks, to transfer the information to said entities, and that they understand the details of the crypto market. Thus, you can regulate it to evolve the markets so that you do not harm the advancement of technology“, he added.
Fintech in LatAm
The regulations still need precise definitions for fintech or projects in Latin America. One possibility may be what CryptoMarket has already endorsed. This is to incorporate substantial improvements in protecting its clients. This includes its practices and processes through the determination to operate as a regulated agent in Europe. This way, users can count on a safe environment and high financial, informational, and compliance standards.
From Koibanx, its CEO Leo Elduayén stated: “The crypto world will end up with two options. On the one hand, there will be decentralized exchanges, non-custodial wallets, and DeFi solutions. In this case, a knowledgeable user has complete control of their assets. On the other hand, mass users will choose to resort to regulated financial institutions. They will integrate Crypto into their value offer and offer them as one more product.“
“Although it may seem unbelievable, this sector will generate the space for massive crypto adoption. We cannot have more exchanges like FTX or Celsius, centralized, unregulated, with bad practices where people control, give them their money, and do what they want without any regulation.“
Martín González, CEO and co-founder of BAG, a blockchain technology company that offers tools specially designed for art and culture-said: “The fact that technology promotes decentralization, freedom, and privacy does not mean that it does not need regulations. Not to curtail those freedoms but to put a consistent legal framework that allows punishing illegal acts and serves as an infrastructure so that highly regulated sectors such as funds, private and public banks, and individuals and legal entities of all kinds can access without being unprotected.“
Europe’s MiCa regulation
The MiCa (Market in Crypto-Assets) regulations in Europe “has exciting things, although it is still deficient since it lags far behind in issues such as NFTs. Technology is always ahead of regulation and, in this industry, much more. We are all waiting for how the United States and China play on the board.“
Regarding the regulatory attempts in Argentina, he opined: “I sincerely believe that they are looking for a new source of collection. But if we focus on promoting blockchain development in Argentina, where there is an outstanding talent, we could be one of the most critical development poles in the industry globally.“