Amidst the market turmoil which has seen the crash of some cryptocurrency exchanges this year, it has been opined that a robust regulatory framework might just be the solution to the current downturn.
According to a report published in ‘Incentiva’, dormant policymakers need to rise to their assignment seeing that “the regulatory environment surrounding cryptocurrencies is constantly evolving, albeit more slowly than the cryptocurrency sector itself.
“Institutions and the general public agree that operating with cryptocurrencies needs a rigorous and transparent regulatory framework. The numerous scams, phishing attempts, and hacks the industry sees have no legal repercussions. This highlights how brazen the fraudsters are and presents a murky image of the bitcoin market.
It’s time to rouse sleeping policymakers.”
“The market will be more stable if cryptocurrencies are subject to more regulation. However, a large portion of bitcoin supporters are vehemently opposed to controls in the market. They think it will stifle innovation and go against the fundamental principles of cryptocurrencies, which include decentralization. Stakeholders and investors have opposing viewpoints. Let’s look at experts’ opinions on the regulatory environment around cryptocurrencies and why they believe it benefits investors.” it added.
The report identified issues of cryptocurrency fraud and the lack of stability in the cryptocurrency market.
Strengthening regulation, it said will bring about more stability in the market as well as a safer crypto ecosystem.
“The absence of rules and regulations encourages wrongdoers’ arrogance, and as a result, rampant fraud, scams, rug pulls, and market manipulation plague the whole business.
“For investors who are worried about daily market fluctuations, a regulatory framework will offer peace to the market and foster a positive work environment in the sector. The government’s robust regulatory framework might assist in curtailing speculation in cryptocurrency assets. Less speculative activity will increase investor confidence, which might attract more long-term investors who have previously shunned a highly speculative, volatile crypto market. Even if it doesn’t attract more people, it may at least alter how they now act toward cryptocurrencies” it said.