Is It Reasonable for Governments to Regulate Cryptos?

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Ljubljana, Slovenia - may 14 Bitcoin and alt coins cryptocurrency close up shoot

Should Governments Regulate Cryptos?

No, the government should not regulate cryptocurrencies people use to buy or play on sites like Vulcan Vegas.

The purpose of cryptocurrency is to have a decentralized method of transaction and asset plus anonymity. If the government intervenes, the cryptocurrency will lose its very purpose.

Cryptocurrency makes it easier for people to make transactions they normally could not do with the usual first money.

Today, we will take a look at the major pros of why the government should not intervene with cryptocurrency.

No Reversals and Counterfeit

At the current state of things, you cannot reverse a cryptocurrency transaction. The liability falls to the owner. If the government intervenes, it surely will allow reversals, and this would cause chaos in the crypto world.

Consumers who use fiat money are so used to using reversals as a way to commit fraud. They would buy something online and then return the product for a refund after using the product.

You cannot do this with cryptocurrency. If you send money using crypto, that is it. You can no longer get it back. This process is good as it makes people more responsible for their actions.

Small Fees for Cryptocurrencies

One thing that makes cryptocurrency ideal is the small fee associated with transactions. Digital asset exchange websites charge less than what traditional banks, credit card companies, and other financial institutions charge.

Why? It is because the entire cryptocurrency sits on a blockchain with no central authority. If there is no central authority, there is no company that needs to get paid.

Once the government intervenes, there is going to be a centralized figure overlooking the entire blockchain. These people have work to do, so they have to get paid a salary.

Obviously, these companies that will eventually become watchdogs of the crypto network will charge money, and the people who will pay for it are those that use cryptocurrency.

Faster Transactions

One of the benefits of cryptocurrencies is that you can transact at blazing speeds. This is made possible by the absence of third-party organizations.

In typical financial institutions, you need to submit a lot of paperwork. If you want to sign a contract, you must print the contract, sign it, and have it notarized by a lawyer.

In the digital world of blockchain, people can use cryptocurrency to execute what we call smart contracts. There is no need to involve third-party organizations to do this. As such, you can execute financial transactions without delay since nobody else is involved but you and the other end of the business transaction.

This process also makes it easier for investors to purchase their tokens. All they have to do is to buy the token or coin online. In traditional investments, you need the services of a broker, which not only prolongs the process but also costs you money.

Universal Accessibility

All people can transact with cryptocurrency. As such, everyone has universal access to it. In traditional financial institutions, you cannot easily open a checking account, much less be approved for a credit card.

So, how will you make online purchases if you are unbanked? With cryptocurrency, you do not even have to worry about this.

Everyone can use cryptocurrency no matter where they are. It is universal. If the government intervenes, then we will just go back to the same phase where we were.

Potential Gains and Returns

The absence of regulation makes cryptocurrency highly volatile. Sure, people know this already. It is a gamble, considering that the cryptocurrency does not really offer any value other than:

  • Anonymity
  • Fast transactions
  • Accessibility
  • Flexibility

Crypto is not the same as stocks, and it should be treated as one. Having said this, government intervention will only push the market prices of cryptocurrency down. If the government gets involved, then they also have a say on the cap of the market value of a cryptocurrency.

In fact, the government can put a hold or order the cryptocurrency to stop trading momentarily. Some of these orders can even last for days or weeks.

It is a natural expectation. When a government makes an announcement, people get scared. If people are scared, they make bad decisions. They sell at a lower price, and then the prices go down drastically.

Summary

The government should leave cryptocurrency alone. Regulating it is not going to help. What it must do is improve its campaign to educate the masses about the risks of cryptocurrencies.

If the government has the full power to regulate cryptocurrency, innovation is going to stop. Why? Because people who invent something new will always have to abide by the regulation of the government.

In addition, the government banning cryptocurrency is only going to send the industry to other countries. And if this happens, the government that banned the crypto is going to lose its money to these other countries.

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