We always discuss Bitcoin regulation as a good thing. Generally, like many others within the community, Bitcoin regulation is seen as the next step towards adoption. Whilst many would like Bitcoin to remain as a channel for investment and as a product that can offer huge returns, many more do believe that the future for Bitcoin is within adoption and that adoption can only come through regulation.
What could regulation mean?
Regulation means that authorities will be able to establish rules and laws against Bitcoin, in order to allow for some government and bank level control. Whilst this does damage some of the original ethos of Bitcoin, it brings with it some advantages. If Bitcoin is regulated, a mainstream audience will believe Bitcoin is safer and will become more likely to adopt it. Moreover, regulation could in turn make Bitcoin safer, something that is a very attractive concept indeed.
The Bank for International Settlements (BIS) have published a quarterly review that reaffirms this idea. BIS believe that overall, regulation will be beneficial for Bitcoin. According to AMBCrypto:
“BIS stated that despite the borderless and entity-free nature of cryptocurrencies, regulatory actions and news regarding regulatory actions have a deep impact on the cryptocurrency markets in terms of valuations and transaction volumes. It stated that in the current scenario, authorities around the globe have a scope to make regulation effective.”
One of the key authors of the report, Raphael Auer has added:
“Overall we find that there is scope to apply regulation, should authorities decide to do so. and we also find that regulation is not necessarily bad news for the cryptocurrency industry. Many cases of fraud and theft, be a hacking, document that it could benefit from a well defined legal status.”
What are the BIS saying?
So, it’s clear that the BIS worry that the free nature of Bitcoin is an issue that allows things such as news stories and regulatory input from authorities all over the world to have a dramatic impact on the value of it. Just look at how news from the SEC in the United States impacts Bitcoin for example. BIS believe that is authorities work together to develop uniform regulations, Bitcoin would no longer be as volatile to news about regulations.
Therefore, by being regulated, the BIS are suggesting that from then onwards, with international regulations in place, Bitcoin will be less reactive to news stories, will be less exposed to instances of hacking and theft and of course, will finally have a legal status that means Bitcoin and it’s ‘customers’ can be better protected on a legal level.
It’s a sentiment many agree with and it’s great that the BIS have recorded this within their quarterly review. With bigger and more powerful entities now recognising Bitcoin as a real asset, it’s only a matter of time before true Bitcoin regulation becomes a talking point at government level, worldwide.
As Auer stipulates, this is a good thing.