Crypto Adoption Has No Future Without Regulation And Law Enforcement

Exchange of any value needs to be based on trust. As the trust flourishes between the parties involved in the transaction, the confidence would increase too with time. It would result in much higher volume and higher value transactions. Bitcoin and other such cryptocurrencies have been expanding its hold in the financial landscape at a great pace in the last few years.

These cryptocurrencies are creating a highly potent decentralized environment. In this scenario, the need for trust is eliminated completely due to the use of blockchain technology. People who are well acquainted with blockchain technology and how it functions are more than welcoming and interested in investing in cryptocurrencies. However, the fact is that majority of the world population is still skeptical about Bitcoin and other cryptocurrencies.

To ensure that the cryptocurrencies attain mainstream popularity and usage, its adoption has to be on a much larger scale. For the wider adoption of cryptocurrencies in the mainstream financial landscape, the consumers would feel more comfortable if there is another protective layer in place. There has to be set standards and rules and a central body they can go to in case of any issues or complaints.

Blockchain technology offers an amazing platform to its participants for exchanging value in an environment that is decentralized and trustless. If the participants do not share their keys, there is no way anyone can steal their value. It is essential for this information to disseminate in society on a large scale to attract more participants. It is important for the crypto world to be based on a set of regulations. With the help of regulations that act as a security for the end-users, it would help the average consumers feel protected and confident when investing.

The Bank Secrecy Act that was passed in the United States in the 1970s is standalone legislation revolving around anti-money laundering cases and also serious terrorist financing cases. This legislation’s primary motive is to ensure that the banks work together with the government to fight against any and all forms of finance-related crimes. In 2001, after the terrorist attack on the World Trade Center, the Patriot Act was passed that further opened broader means of communication between the government and the banks.

In 2019, the international governing body named FATF or Financial Action Task Force extended its set of travel rules regarding money and assets to banks and virtual money exchanges. According to the new applied rule, all virtual asset service providers have to share the identity of any user trading assets of over $1,000. While it does seem straightforward, it ensures that the virtual asset service providers are compliant.

It meant that such providers and exchanges have to screen their users and set certain rules for trading and value exchanges to identify abnormal patterns. The virtual asset service providers also have to share their data or list of all blacklisted customers with the governing body and virtual asset providers.

To be compliant, the KYC or know-your-customer information would also have to be shared by the virtual asset service providers with the authorities as well as other exchanges. Such regulations would help the investors in the long-term and add sustainability to the crypto-framework as well.

A new regulatory framework was recently introduced by the Conference of State Bank Supervisors for the payment companies, money service businesses, and cryptocurrencies businesses and companies. Such regulations would be applicable for major payment companies like PayPal, Western Union, and 76 such companies. The layer of regulations and supervision of law enforcement is the way ahead for the digital assets companies and would help accelerate adoption on a wider scale.

The Great Unbanking: How Defi Is Completing The Job Bitcoin Started

2020 was the year of the COVID-19 pandemic, in a broad sense. Governments have been found lacking since they bill for 1 million deaths and over 30 million infections. The institutions have crumbled. Politicians have responded too slowly. All the mechanisms in place and newly developed to protect us have collapsed: hospitals, elderly care, testing, supply chains of protective equipment, touch tracing, etc. Yet 2020 was also the year of decentralized finance, which became known as DeFi, to a very large degree.

Crypto is DeFi

In order to explain why DeFi caught the imagination of the crypto-landscape as a whole, it is less about the scandalous returns for farmers and more about the possibilities in the future.

Cryptocurrency has always been obsessed with potential prospects and the technologies behind them.

As Bitcoin ( BTC, in Spanish), came into being in 2009, those acquainted with it soon realized that it might be money’s future. Eleven years later, Bitcoin has fulfilled its pledge with its decentralized global system of nodes and miners, which keeps the network working and safe.

It is also an important company-wide investment tool that continues to increase in importance for investment. Not only is it a convenient and easy way for people to transfer money without authorization to each other. In expectation of capital growth, broad and company owners hang onto it.

Since Bitcoin still depends on a financial community surrounding it to keep it going, cash still functions like currency. But it is a very small ecosystem; consists of networks safe for transfers (miners and node operators), bundles and exchanges, through which digital and increasing numbers of fiats can be traded.

Yet a financial market design as we know it has more functionalities in mind: credit, lend, interest benefit, tax charge, savings, etc. Bitcoin never was built to handle any of these processes – but DeFi is.

The next logical step in improving crypto conventional finance’s progressive position is the development of a decentralized financial network based on Ethereum.

DeFi is Bitcoin 2.0 in several respects. And thus, DeFi — though focused on the composability of Ethereum and its intelligent contracting capabilities — fosters Bitcoin’s storyline into the future in which Bitcoin first gives us confidence. As we are about to understand from each new DeFi Protocol, this would be a world without banks: a world without banks.

DeFi reveals that Ethereum is complementary to Bitcoin. Ethereum is hosting a project that completes the Bitcoin loop by recreating the financial system both from within and outside.

The more vocal opponents of the DeFI subsector would point out that, along with many others, SushiSwap, Cream, and Yam appear, implying that the campaign is more of a circus than a credible challenge to an enormous finance service sector.

These protocols are labeled vampire forks, forks of existing protocols to capture liquidity. A groundbreaking Rolling Stone report helps bring them into context whether vampire forks are damaging – because they are uncertain. Matt Taibbi called the haemoth as he was playing the core role of Goldman Sachs in nearly every financial crisis of the previous century:

The great vampire calf wrapped around the face of mankind and continually crammed in the blood into something that smells like gold.