The buzz that cryptocurrencies have been making is quite difficult to ignore for the Governments. If you do not know what Cryptocurrency is, let me tell you in brief. Cryptocurrencies are mainly digital currencies that are cryptographic in nature. The most famous Cryptocurrency is Bitcoins.
Since 2020, cryptocurrencies and Bitcoins, in particular, have reached new heights. To start investing, click here to create your trading account.
The Stimulus Packages have generated a bullish market in Bitcoins, and it has skyrocketed the price of Bitcoins. It is mostly illegal in eastern nations, where people are mostly illiterate. However, certain rules and policies need to be changed ASAP.
5 Cryptocurrency Policy Rules and Regulations That Need to Be Changed
There are certain rules and regulations that prevent Bitcoins from being widely accepted as a global currency.
1. Requirement of Regulations
There should be some sort of regulations in cryptocurrencies, or it would be used more in conducting illegal activities. Most Governments of the western hemisphere are on the verge of launching their own Central Bank Digital Currency. They are doing so to tackle the rising popularity of Cryptocurrency.
The Governments are afraid that if this trend continues, then the whole financial system might collapse, and banks might have to be closed. Cryptocurrencies are highly regulated in China. Germany has taken a step forward and legalized Cryptocurrency as a substitute for fiat currencies. And in countries like Poland and the UK, government-regulated crypto ATMs are being built.
2. Non-volatile (Institutional Investors)
The one thing that I personally hate the most about cryptocurrencies is their volatility. Cryptocurrencies, especially Bitcoins, are highly volatile in nature. The value of Bitcoins changes every second, let alone every minute or hour.
This volatility factor makes Cryptocurrency a very difficult option for trading. This is the reason why for transactions, Ether is considered to be the best option.
The volatility of Bitcoins does not make it appropriate for trading. With the institutional investors stepping in the game, though, the prices have slowly started to stabilize.
3. It needs to be widely accepted.
Cryptocurrencies, especially Bitcoins, are often seen in a bad light. The perception of cryptocurrencies needs to be changed. The Government can only do it; the first step would be to educate the people about cryptocurrencies and their potential.
And the second step that would help people be more accepting of Cryptos is for the Government to legalize them. If the Government steps in, then the malicious activities would be very less, and there would be a constant fear of facing imprisonment among the hackers.
Currently, in order to mine Bitcoins, heavy computational resources are required. Not everybody can afford the mining rigs to mine Bitcoins. Also, a huge chunk of money goes for the electricity bills.
Also, what I do not like about mining is it takes days to mine a Bitcoin. The Government steps in; then, the mining process would be much more organized. The Government could also give our mining rigs at a subsidized rate.
In some parts of the world, Bitcoins are heavily taxed. Take the United States, for example. The IRS has officially announced that Bitcoins would be considered as property, and hefty property taxes would-be put-on Bitcoins.
This regulation should change, and the Government must start considering cryptocurrencies as a substitute for fiat currencies. While it is not taxed in some parts of the world, it is heavily taxed in the other parts. The Government does it so it can earn revenue from it.
These are some rules and regulations that need to be changed for the more efficient use of Cryptocurrency. The Government should ponder on these, or else there is soon going to be a time when Bitcoins’ popularity could not be controlled.