The crypto industry is finally reaching another milestone in its development for world adoption. The United Kingdom’s Treasury reveals crypto regulation proposals for cryptocurrencies with a focus on Bitcoin (BTC), exchanges, and all businesses based on the blockchain. These will address all of the growing concerns in the crypto trading economy.
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What Is Under Crypto Regulation Proposal?
The Treasury’s proposal is focused on the turbulent period that cryptocurrency markets are experiencing between 2022 and 2023. Investors are losing confidence because of certain bad actors and failed ventures but there is still potential for growth that digital assets have yet to tap into. The Treasury believes that the following is what the majority of crypto traders need:
Platforms Must Submit Demands Crypto Must Meet for Trading
Hundreds of blockchains and cryptocurrencies were released in the last couple of years but the top assets remain the same. However, only Bitcoin, Tether (USDT), and Ethereum (ETH) continue to stay at the top of markets or be accepted on crypto gambling websites. Many of these also became instrumental to pump-and-dump schemes and rug-pull scams plaguing the crypto economy.
Thus, the Treasury proposes all crypto businesses like exchanges and brokerages submit criteria for every digital asset. The plan is to minimize digital assets that can be sold on these platforms, preventing the distribution of crypto that is weak in the market or fraudulent.
Bringing Crypto Into Mainstream Regulation
Mainstream regulation is strict and will formally remove blockchain technology from the ‘uncertain frontier’ that it is known by. Crypto’s volatility was its main appeal when it was trending but it is also what makes its value drop continuously today. The Treasury believes that it’s time to stabilize its price changes before it becomes a fading fad.
Time-limited Exemption for Crypto Companies
Treasury foresees that these proposed regulations are likely to slow down adoption temporarily. They will be offered ample time to issue promotions after the new systems are live. It’s still a proposal and the time limit is yet to be discussed but it is following a crackdown on misleading adverts in recent months.
What Prompted Crypto Regulation Update?
The crypto economy underwent a lot of world-shattering news over the years. All of them significantly wavered investors’ confidence in digital assets and are halting the growth of certain blockchain-based ventures. All of them can be summarised into two kinds of events:
Presence of Fraudulent Actors
The Treasury is most concerned with the presence of scammers. Some profit from initial coin release (ICO) but run away with the funds while others outright steal crypto from exchanges. Implementing mainstream regulations in these cases is needed to protect digital asset users and regain investors’ confidence.
Fall of the Large Crypto Exchange
Among the most distressing news to shake the crypto world is when FTX, one of the largest crypto exchanges, collapsed, and millions worth in digital assets were lost. The only issue that brought its downfall was the mismanagement of funds during the crypto winter. It can be avoided with proper supervision and the Treasury is among the most qualified for that position.
What Does Crypto Regulation Mean for Crypto Users?
Bringing mainstream regulation to crypto is necessary to realize investors’ vision of making it the new standard mode of payment. It isn’t likely for services like crypto gambling to adopt more kinds of digital assets but it would certainly help widen options. Businesses support only the mainstream ones like BTC and ETH but they can widen their portfolio if the rest of the market is kept safe. The Treasury is still unsure how to improve its proposals but they have forecast that this will be effective in 2024.
