We get from using bitcoin, the main profit and loss are the sudden value changes, as a huge rise or fall in price. So, the regulation of the bitcoin will undoubtedly affect its value. These cryptocurrencies are digitalized and are independent of Government agencies or institutes. This can be considered a problem for the policymakers who deal with the exact meaning of assets. So, for protecting these investors from your company or business, there is a need for regulation. The reason is that they might lose a considerable amount after investing due to the change in cryptocurrency because of the fall of price, so they will not be ready for accepting. So, the solution to this problem is the regulation of bitcoins.
The necessity of regulation of bitcoin
The bitcoins and other cryptocurrencies are all digitalized, so their value changes from time to time, it may be a rise or a fall. This can affect the investors, so to protect them, regulation of bitcoin is a suitable method. Minimal consumer protection, volatile prices, chances of getting hacked, money laundering, etc., are also other problems that can be solved by regulation. Also, many have issues related to how these currencies function and are necessary to supervise them. The most concerning problem is the unexpected and random change in cryptocurrency value, which will affect us heavily. If it makes a lot of profit one day, it will make a massive fall the next day. The change in price or value cannot be predicted, and it changes within a short period. So, no one can believe it and invest it as it can change unexpectedly. The regulation of Bitcoin could only solve this significant problem.
Essential reasons for regulating bitcoin
Here are the main three reasons why cryptocurrency should be regulated:
- The regulation of Bitcoin or any other cryptocurrencies helps in stabilizing the value. It faces many changes in its value within a few periods, which may bring profit or loss to you. The unexpected increase in its value will surely make the investors happy, but at the same time, a sudden fall will make them feel disappointed. So, regulation will be the best option for preventing both the extremes we have to face. Because massive fall will make the investors unhappy, and their interest in investing will lose.
- Regulation is the best option to avoid the fears related to using cryptocurrencies. Using cryptocurrencies is safe as it is done with at most security. In recent times, we had heard about the theft that happened with these digitalized currencies. So, regulation will help in reducing those fears and also help in the stabilization of these values. We can even increase the spread of its user’s number with the rule as it will get a good acceptance from everyone.
- As the IRS does not see cryptocurrencies as money but sees them as an investment. So, if we keep it as an investment, you must have to report all the gains and losses that happen to the cryptocurrency. It needs to be regulated as many companies evade taxes because it is not considered money but an investment. And all the transactions, small or large, must be reported, which can only be solved by the regulation of Bitcoin.
How can they be regulated?
Bitcoins are cryptocurrencies that are decentralized and independent of any companies, government agencies, etc. They have entities inside a group of the network where the information is securely stored. It is challenging for one authority to regulate all over them as it is a spread network. So, to control them, we must look forward to the main things that will stop their usage without the authority’s opinion. So, they do not need much permission or approval from the Government or any other authorities for cryptocurrency exchanges by hitting in this stream, which is essential by pushing anti-money laundering and knowing your customer protocols. At that time, these cryptocurrencies have to rely on the authorities, and they can do whatever they need. So, by doing this, we can create regulations for exchange purposes. We can also target individual cryptocurrency users. We know that these cryptocurrencies are safe to use, but there is some recent digital money theft. So, by implementing regulations on cryptocurrencies, we can make them secure and also be able to track them easier because there will be a task team for doing these works quicker.
Benefits of bitcoin regulation
- By using cryptocurrencies, many are gaining a lot of money daily, but many are losing too. Many groups of scammers provide scam coins. If we invest in those groups, the owners will disappear with the money that investors invest and stand helpless. So, many investors have lost lots of cash by falling into scammers’ hands. For stopping this, cryptocurrencies should e regulated. The regulation can make specific criteria and ensure that the new coin launched coin meets all these, and only then it could be used. We can reduce scam up to a particular limit by doing this.
- If Bitcoins are regulated, there is an excellent chance to attract investors into this market. Because in the cases now, the investors will not be sure to invest it as their value can change day by day. You can gain money but can also lose, so if it is regulated, it could stabilize all time without any worries. It could solve the fear of vanishing cash in an instant.
- Many think that Bitcoin is the coin of criminals as it was felt that they are used for sex trafficking, buying drugs, etc. So, their image has faded away due to these kinds of criticism, which also leads to a statement that it is a threat to the financial system. So, there is a significant necessity to regulate them not to be banned in any countries.
Bitcoin regulation seems to have many advantages for the survival of users of cryptocurrencies. The regulation is necessary for many functions. By regulation, investors could leave their money without any fears.