Bitcoin was created so that it could function without the approval or authorization of any government. It was created precisely so that it would exist outside of the regulated banking space. Sending and receiving does not require formal identification, and there are no restrictions on how many addresses one can own or how those addresses are used.
In some ways, this is great. allows for individuals that were perhaps due to their lack of having formal identification, or for their inability to get to a banking location to open an account to get critical financial services. Further, like allow for an enhanced degree of privacy when making transactions. While this is all well and good, the situation is far from perfect. And that is in part because lacks sensible .
Let’s Clear the Air
and other currently exist in a legal gray area. A handful of countries have actually made (Egypt, Bolivia and Nepal to name a few). But, most countries, including the United States, currently treat as a form of property. Since it’s not viewed as currency, this and interacted with by businesses large and small, financial institutions, investment firms, and so on. For instance, it’s conceivable that many retailers are choosing not to get involved with in part due to lack of legal clarification and fear that getting involved with crypto could be . That’s just our speculation, but it’s quite likely to be true.
So what is the next step to help get over this current roadblock that’s impeding development? The answer to that is smart and transparent .
To some crypto maximalists, is something of a curse word. It brings to mind images of jackbooted thugs kicking down doors. Further, the word suggests increased scrutiny on transactions and the destruction of easy-access privacy. But are these fears founded?
Regulation is Inevitable, Let’s Embrace it
At Celsius, we believe that will happen whether we want it to or not. The only way that crypto won’t be regulated is if the entire ecosystem were to disappear, thus precluding any need for . But and use cases multiply, becomes inevitable. So instead of trying to frame as a sort of boogie man, it’s better if we collectively lean into it and guide it in ways that are productive and beneficial to all parties.
Let’s think about a few of the ways that could benefit and its users. First and foremost, would mean acceptance and clear definition. This may not sound very exciting at first, but it would fundamentally change the way that businesses, banks, and financial institutions could interact with . It would stop the current chilling effect we are feeling due to the vagaries of the law as it stands. Businesses large and small that have had their eyes on can now dive in head first, fully confident that they understand the consequences and benefits of what they are doing.
ETFs, Security Tokens Abound
Clarity in would lead to more and more investment products on stock exchanges and other investment platforms. It would almost certainly mean that investment firms wanting to launch their own ETFs (exchange-traded funds) that are based on would be able to do so far more easily than today.
Another potentially amazing effect of proper could be the formalization of . In simplified terms, a security could be essentially a stock or share in a company that is represented as a asset — such as an .
With security , individuals would no longer need stockbrokers and other intermediaries to invest directly in companies. While security would require ID verification, this verification could be done just once for a nominal fee, after which all subsequent trades could be done without the need for any outside interference. Compare that to today where major stockbrokers charge upwards of $15 or more per trade.
Third, it is entirely possible that ownership of significant assets like cars, , or even businesses could be tokenized. In other words, given the proper regulatory environment, it could be possible to transfer the ownership of your car to someone else merely by sending them the that represents your car. That would mean no more burdensome paperwork or trips to registration offices. Instead, selling your car would be as easy as transferring a and handing them the keys.
Similar to securities , some projects aim to tokenize commercial properties and split them up into thousands of pieces. In these arrangements, ownership of any of these pieces would entitle you to potential benefits up to and including a share of the proceeds of the rental income earned by the property. In that way, it would be just like buying a dividend yielding stock, except that you would be owning a piece of an office building downtown.
Keeping it Wild
The good about is that not all aspects of would be under the thumb of a regulator. For example, if widespread occurs, there would be nothing stopping you from creating an address and sending and receiving . Further, as the sheer number of available grows, it’s inconceivable that world governments would attempt to regulate all of them with a hands-on approach.
What this means is that if you want to interact with in a way that’s out in the open and under regulated conditions, you are free to do so. Conversely, if you want to remain anonymous or live in the part of the world that does not have or need crypto , you do not need to participate in that.
A reasonable metaphor for this is how the Internet works today. Most major Internet companies like Google and Amazon work closely with regulators and report everything that happens. Conversely, small Internet startups in countries that have few requirements for web-based business regulations are not subject to similar laws.
Looking further into the future, it’s entirely possible that individuals will be incentivized to use through regulated channels. For example, your activities could contribute towards something like a credit score, or otherwise be used to verify your savings or financial situation. It could also make paying taxes much easier, as automating all of your financial transactions could be done in seconds with all the information secured on a public . While using outside of regulated channels won’t be illegal per se, you would likely not benefit from any of the advantages that come with regulated routes.
Here’s the bottom line. will allow for business and crypto to finally interact with each other without fear. It could bring in a new golden age of development the likes of which we have never seen before. Or, it could have minimal impact and things will continue as they are now, mostly unimpeded.
Either way, we think that smart, carefully written, and clear could help grow and evolve into indispensable parts of all of our lives.
Published at Sun, 03 Mar 2019 08:49:21 +0000
