Without a doubt, the crypto market has already landed in most countries all over the globe that governments are raising their concerns. At least there are four strategies taken by states in response to cryptocurrency operations. Get to know how states adapt not only with digital currencies but also with crypto exchanges like the Bitcoin Aussie System trading platform.
Stay Neutral and Let It Be
There are several countries still imposing the hands-off approach when it comes to dealing with the emerging and dominating crypto market. Despite the growing number of subscribers of different nationalities, it appears that most states are confident that the current cryptosystem can better take care of itself. It employs a completely decentralized system that is expected to have put in place some useful measures. It would put clients at ease knowing that laissez-faire still has its magic which could be maximized with some trading tips. The neutral approach could only work in a free market that can self-regulate. It is noteworthy that the London School of Economics and Political Science published a study on whether Bitcoin is a self-regulating currency. It has explored the mechanisms behind the pioneer in the crypto market and its ability to sustain itself by relying solely on its users. This has been envisioned by its founder from the very start to differentiate cryptocurrency from the typical financial system.
Regulate Crypto Market
While some are forced to submit into regulation such as the case of Ripple with the current suit involving registration under Federal security laws, at least some digital currencies have decided to voluntarily enter into regulation as far as compliance with the Know-Your-Customer Policy and Anti-Money Laundering Law are concerned. These are necessary measures for consumer protection that might help the entity build a loyal following.
Several countries have also launched regulatory measures to challenge the credibility of crypto exchanges. With Japan having been progressive in regulating crypto trading platforms, some countries have decided to make their version of crypto regulations. South Korea is about to introduce its regulated crypto exchange system before the year ends. It has been pouring all efforts to facilitate registration and later monitoring of transactions to ensure safety and security against fraud.
Join the Competition
The chances are that if you cannot beat them, join them! If governments are threatened by the rise of the crypto market, they should know that they can always jump into the competition. There is ample room to develop its version of digital currencies. The United States, for one, has already announced its digital banknotes courtesy of the Central Bank. It carries the advantage of financial security with the value of virtual currency guaranteed by the state. More than anything else, it creates an even better portfolio by providing another option for investors.
Government-issued digital coins are traded with low risks. It is a differentiation strategy that could always work to its advantage. The risk associated with cryptocurrencies could turn out to be an opportunity for a bank-guaranteed virtual currency. Nonetheless, the choice would still be left to the sound discretion of the investing public.
Monopolize Digital Currency
Perhaps the most controversial response to the growth of the crypto market happens to be the build and ban introduced by China. It is developing its digital currency not to compete with the already existing ones but to gain complete control of the market. There would be a ban on cryptocurrencies and crypto exchanges in the country. This way, it could implement a convenient monopoly.
The problem with monopolizing digital currency is that such a move would cripple the movement of crypto coins on a global scale. One of the essential attributes of cryptocurrencies is the ability to do inter-country trading. Restricting the extent of operations would also mean restricting growth for any digital currency with operations limited to a particular locality. In this case, digital currency could only be as good as any traditional currency.
Whichever works best in your region, it is important to be reminded that cryptocurrencies are only as valuable as their patronage and that users are advised to exercise reasonable diligence in terms of trading.
Read Also: Top 5 Best Ways To Make Money With Bitcoin In 2021