Since Bitcoin became mainstream on the market, there have been numerous talks regarding whether it would be wise for governments to implement a set of regulation, meant to protect both the public, but also companies from abuse, and possible market manipulation.
While the market is divided into two sides, with one side believing that regulation will spell the end of the bitcoin haven, whereas the other thinks that some form of regulation is wise, this is indeed a sensible topic.
According to recent reports, the CEO of the Chinese Bitcoin exchange BTCC, which also happens to be one of the biggest at this moment in time, believes that if not properly regulated, digital currencies may actually risk getting out of control, as people continue to invest in cryptocurrencies, and related projects on a daily basis.
This is quite understandable given the fact that both bitcoin and Ethereum, which are by far, the most popular cryptocurrencies on the market, has seen massive volatility during the last couple of months. In May, following a 19% fall in the bitcoin price, $4 billion worth of its value was simply wiped from the market. Additionally, last month, Ethereum decreased in value with around 10% in a single second! Even at the moment of writing, both bitcoin and Ethereum are facing price volatility, with the value of both digital assets briefly dropping.
Bobby Lee, the CEO of BTCC, stated that: ‘I think regulation is much needed for this new asset class because otherwise it will run amok from society’.
In a way, this is understandable, given the fact that numerous market analysts predict that in 10 years alone, the price of Bitcoin will likely soar above $100,000, which is great news for the market. Yet, if not properly regulated, both companies and investors would be briefly able to manipulate the market to their own gains, which is definitely not something that is wanted by most digital asset holders around the world.
Bobby Lee continued by saying that: "But the challenge is how to craft the rules around this new technology. I think it's taking the lawmakers and regulators some time to wrap their minds around it, and to come up with the appropriate rules and laws to govern companies, how we do business, to govern individuals (and) how people conduct business online."
Currently, regulators from all around the world are actively looking for the best ways to regulate digital assets, while also trying to not hurt anyone in the process. Not long ago, for example, the People’s Bank of China, decided to implement more regulation by creating a task force, charged with inspecting the work ethics of bitcoin exchanges, while also cracking down on money laundering.
Based on everything that has been outlined so far, is there a need to regulate digital currencies? Let us know your thoughts in the comment section below.