Bitcoin and most major cryptocurrencies have surged in prices amid a rise in its popularity by investors and the financial industry as well. The growth graph of acceptance as a currency of exchange is growing and the United States has lately signaled for a regulatory environment that would adopt crypto assets. The regulatory framework is still awaited though and it is uncertain and complex too.
Drafting a new framework is not easy. It involves a huge task and should be evaluated beyond cryptocurrencies. Electronic payments, blockchain technology, stable coins, non-fungible tokens, digital bank currencies and several more aspects are to be considered. Various aspects are to be addressed by the regulators. It is a long-term plan.
Several agencies are to play active roles in the building up of frameworks like the US Treasury, FinCEN and CFTC. Cooperation and coordination of international regulatory agencies could be required.
Meanwhile, service providers, regulators and lawmakers are looking for regulatory certainty. It is questioned who what should be prioritized, who will lead and what time is to be taken to shape up the framework.
Several obstacles need to be tackled before rolling out crypto regulations. The biggest is friction among the regulators. Even though the SEC is highly powerful with respect to regulation, the CFTC, the Federal Reserve Board, FinCEN and Treasury need to give their input.
Beyond all these, it is not to forget that the sector is still in the evolutionary phase and it is yet to understand what may come up in the future. CFTC sees digital assets as commodities while SEC calls these securities. Treasury considers crypto as currencies. The revenue department views from the eyes of taxation.
Cryptocurrency is just about a decade old. This means the world will take time to understand the segment. Bitcoin is the most popular among thousands of cryptocurrencies. It was launched in 2009 and became the first cryptocurrency in the world.